Deutsche Börse Releases Economic Details Of Euronext Merger Proposal - Shareholders To Receive Combination Of Shares In NewCo And Cash - Synergies Of 300 Million Euros P.A. Before 60 Million Euros Customer Benefits

In light of current developments and recent public speculation Deutsche Börse publishes the economic details of its proposal regarding the transaction structure, exchange ratio as well as synergies and customer benefits arising from a potential combination between Deutsche Börse and Euronext, as submitted to Euronext management.

1. Transaction structure and exchange ratio

Deutsche Börse proposes that the Merger would be performed by way of a new legal entity (NewCo) making an offer to the shareholders of Deutsche Börse and Euronext. Shareholders would be asked to tender their shares against a combination of NewCo shares and cash.

The percentage of NewCo shares that Deutsche Börse and Euronext shareholders would receive is intended to be based on the volume weighted three month average market cap ratio of the two companies. The relevant time period ends with the announcement of the offer by NewCo. This announcement shall immediately follow upon the signing of a binding Business Combination Agreement.

The cash component is designed to introduce debt into the capital structure of the combined group. Deutsche Börse anticipates that NewCo will pay out approximately 2bn euros in cash to shareholders tendering their shares to NewCo (calculated on an acceptance rate of 100 percent of all Deutsche Börse and Euronext shareholders).

The following calculation illustrates the mechanics of this approach: Assuming the volume weighted three month average market cap ratio of the two companies would equal Monday's closing prices of Deutsche Börse (101.30 euros) and Euronext (67.55 euros) this ratio would amount to 57:43. If the assumed exchange ratio for Deutsche Börse shares in NewCo shares is 1:1, the implied exchange ratio for Euronext shares in NewCo shares will be 1:0.68. The cash component per Euronext share would be 7.72 euros per share, the cash component per Deutsche Börse share would be 11.38 euros. The transaction terms also assume Euronext will pay to its shareholders its ordinary dividend of 1 euro per share this year and its previously announced extraordinary dividend of 3 euros per share.


2. Synergies and customer benefits

Deutsche Börse has identified gross synergies of approximately 300 million euros p.a. given the unique combination of two of the world's largest derivatives and equities markets. These synergies are expected to come from the following areas: IT cost synergies of approximately 100 million euros, non IT cost synergies of approximately 90 million euros and revenue synergies of approximately 110 million euros. Deutsche Börse intends to grant benefits of some 60 million euros to customers of the combined group. This leads to net synergies of the combined group of 240 million euros p.a. thereby creating significant earnings per share accretion and substantial value creation for the respective shareholders of Euronext and Deutsche Börse.

Deutsche Börse strongly believes that this transaction represents the most attractive combination for shareholders, customers and the financial centers involved. Furthermore it is the only option available at this point that accelerates to the further integration of European financial markets within a European regulatory environment.