Deutsche Börse AG Will Be European - Moving Forward With European Consolidation - Expanded Circle Of Ownership Through Capital Market Transaction - Repositioning And Name Change To "Euroboard"

In view of the converging European capital market, Deutsche Börse, the German stock exchange organization, is realigning its corporate strategy and will change its ownership structure: More international market participants are to have the opportunity to participate in the company capital. The Supervisory Board unanimously approved this step, and the General Meeting of Shareholders is to vote on the decision next year, as the company reported in Frankfurt on Monday. Within the framework of the ownership reform, private placement of the shares, a capital increase, an initial public offering of Deutsche Börse AG or a combination of these measures were mentioned as possible options. Deutsche Börse is well positioned for the realignment. As the largest and financially strong European exchange organization, it is already the leader in transactions on the European capital markets, in both the cash market and the derivatives market, which it operates with Swiss Exchange on a joint basis. Deutsche Börse also has the largest network of participants, covering all of the European time zone and parts of the U.S., with more than 650 participants and over 10,000 terminals. Deutsche Börse regards the corporation's focus on Europe as a logical outgrowth of the converging European capital market, which is making increasing gains in efficiency. In this environment, the perspectives of issuers, investors and intermediaries are changing as well: Issuers expect markets in which they raise capital to have a European orientation, and investors are investing according to sectors across the borders of the old currency areas. Intermediaries want uniform trading and settlement platforms, as well as influence on the corporate governance of the organizations that operate these platforms. They also want to have a share in the added value of these organizations. By including leading European and international houses in the corporate governance, Deutsche Börse is expanding the congruence of interests between shareholders and participants which is currently given mainly for German banks and securities trading firms. Global players already contribute a major portion of the Deutsche Börse transaction volume, without holding a commensurate share of the equity. By its own estimates, Deutsche Börse's good positioning in the market makes it an attractive investment for banks and securities trading firms with international operations. The fact is, unlike most of its competitors, Deutsche Börse covers the entire output chain of trading and settlement in the cash and derivatives market. Therefore, a participation in Deutsche Börse is more valuable than the purchase of shares in an electronic communication network (ECN) or an exchange, as CEO Werner G. Seifert states in a press release. The funds from the capital market transaction are to be used for further expansion of the technical infrastructure and of the customer base. Plans call for, among other things, the establishment of so-called ECNs with Internet-based services. Together with the European Clearing House (New Cedel International), in which Deutsche Börse holds a 50 percent interest, a central counterparty is to be established for netting in cash and derivatives trading. The strategic goals stated by Deutsche Börse chief executive Werner G. Seifert start with the rapid establishment of a single European cash market together with the other exchanges in the European Exchange Alliance and with substantial support from international market participants. In the derivatives market, Eurex's position as the world's leading derivatives market is to be expanded further. The European clearing landscape is to be further standardized, with integrated trading and settlement. The full ground-coverage network of participants is to be expanded to more than 800 participants, with a uniform technology standard for the Xetra and Eurex trading platforms. Overall, the aim is to achieve the lowest transaction costs worldwide at the highest quality standards. As a visible sign of the clearcut orientation to Europe and the reform of the ownership structure, the Deutsche Börse name will be changed to "Euroboard". This name is the agenda and stands for the consistent and thorough internationalization of the corporation, which for a long time now, by its own account, has been far more international than the name Deutsche Börse implies. The derivatives market is based in Zurich, for example, and the clearing organization in Luxembourg. Moreover, the company has branches in London, Paris, Zurich and Chicago, and over half of the participants are remote members.