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The strategic partnership creates the world’s largest and most liquid securities marketplace with a combined market capitalisation of around €15 billion / $20 billion. With global market leadership positions across cash equities, derivatives, market data and technology, NYSE Euronext will be the world’s most liquid marketplace, with average daily trading value of approximately €80 billion / $100 billion, and the world’s premier listing venue, with total market capitalisation of listed companies of €21,000 billion / $27 trillion.
NYSE Euronext will be a U.S. holding company, the shares of which will be listed on the NYSE, trading in U.S. dollars, and on Euronext Paris, trading in Euros. Its U.S. headquarters will be located in New York, and its international headquarters in Paris and Amsterdam (which will be the centres of operations for its international activities), with London as the centre for its derivatives business.
Under the terms of the agreement, each share of NYSE will be converted into one share of NYSE Euronext common stock. Euronext shareholders will be offered the right to exchange each of their shares for 0.980 shares of NYSE Euronext stock and €21.32 in cash and will be able to elect to receive all shares or all cash through a “mix and match” procedure, subject to proration. Euronext will also pay its previously announced extraordinary distribution of €3 per share.
Both parties believe the merger will create substantial value for all stakeholders through the realisation of pre-tax annual cost and revenue synergies estimated at €295 million / $375 million. Of this amount, approximately €195 million / $250 million result from the overall rationalisation of the combined group's IT systems and platforms. Based on Atos Euronext Market Solutions’ leading technology and the management team’s proven integration track record, over the next three years, NYSE Euronext’s three cash trading systems and three derivatives trading systems will be migrated to a single global cash and a single global derivatives platform. In addition, 10 data centres (six in the U.S. and four in Europe) will be reduced to four globally-linked data centres (two in the US, two in Europe), and four networks will be reduced to one. These technology savings are incremental to the previously announced technology savings expected from the NYSE/Archipelago transaction. Furthermore, NYSE Euronext’s market leadership position in cash equities, listings and derivatives creates opportunities to expand the combined revenue base by an estimated €80 million / $100 million over a three-year period. NYSE Euronext will leverage the world’s most recognized exchange brands to create new products with global reach, increase its share of international listings and materially strengthen its competitive position in the U.S. equity derivatives market, the largest such market in the world.
NYSE Euronext will have a balanced management team and organization. The Chairman of NYSE Euronext’s single-tier Board of Directors will be Jan Michiel Hessels, Euronext’s current Supervisory Board Chairman, and Marshall N. Carter, NYSE’s current Chairman, will become Deputy Chairman. John A. Thain, NYSE’s current Chief Executive Officer will be Chief Executive Officer of NYSE Euronext and Jean-François Théodore, Euronext’s current Chief Executive Officer, will be Deputy CEO and Head of International Operations of the combined company. Messrs. Théodore and Thain will also join the Board of NYSE Euronext. The Board of Directors of the combined company will be initially comprised of 20 directors, 11 directors designated by NYSE and 9 directors by Euronext. The balanced governance structure will be incorporated in the NYSE Euronext by-laws. Changes to these provisions and certain key strategic decisions may only be taken by supermajority vote. The executive committee will be drawn equally from each of NYSE and Euronext.
Each of NYSE Euronext’s markets will continue to be regulated in accordance with local requirements. Specifically, NYSE Euronext’s European markets will continue to be regulated by their existing regulators, and the SEC will continue to regulate the U.S. markets.
The NYSE Euronext exchange offer for Euronext shares is expected to be launched within 6 months, following the satisfaction of certain conditions, including receipt of regulatory approvals and NYSE and Euronext shareholder approval. The parties are confident that the transaction raises no competition issues.
Jan Michiel Hessels, Chairman of the Supervisory Board of Euronext said: “The Supervisory and Management Boards of Euronext have been through an extensive process of identifying the best consolidation opportunity for our shareholders, issuers, and users, and we strongly believe NYSE is the best partner. This merger of equals, based on a balanced governance structure, will deliver significant shareholder value from substantial, quantified and deliverable synergies, and will allow Euronext to play a full role in reshaping the global capital market.”
Marshall N. Carter, Chairman, NYSE Group, said: “My colleagues on the NYSE Group Board of Directors and I are extremely pleased with the combination agreement announced today and extremely excited by the prospects of this transformational deal. This transaction will produce significant synergies and outstanding value and growth opportunities, and we look forward to working toward its completion.”
Jean-François Théodore, CEO of Euronext, commented: “Combining NYSE’s global brand and leading cash marketplace with Euronext’s international, cross-border, and diversified product range, technology and integration skills is the winning global platform for growth. Moreover, this partnership will allow the successful Euronext model to be extended further across the Eurozone and is the best way to create a competitive European capital market.”
John A. Thain, Chief Executive Officer, NYSE Group, added: “This is an important development in the history of the NYSE, Euronext and the global capital markets. A partnership with Euronext fulfills our shared vision of building a truly global marketplace with great breadth of product and geographic reach that will benefit all investors, issuers, and our shareholders and stakeholders.”
Citigroup Corporate and Investment Banking is acting as financial advisor to NYSE Group. In the transaction with NYSE, ABN Amro and Morgan Stanley are acting as lead advisors of Euronext. BNP Paribas and UBS Limited are acting as co-lead.
Joint Press/Analyst Conference Scheduled in Paris, Friday, June 2, 2006
2:30pm (Paris) / 8:30am (New York),
Location: Palais Brongniart, Place de la Bourse, 75002 Paris;
Entrance: rue Notre Dame des Victoires
Euronext N.V. and NYSE Group, Inc. officials will conduct a joint press/analyst conference on Friday, June 2, 2006 in Paris at 2:30pm (Paris) / 8:30am (New York). Press and analysts are invited to attend; a live webcast of the conference call and phone dial-in (listen only) will be available. A presentation that will be referenced during the call will also be posted to the website shortly before the call begins. Those wishing to listen to the live conference via telephone should dial-in at least 10 minutes before the call begins.
Live Global Telephone Dial-in Information (toll free):
Live Dial-in: +33 (0)1 72 72 01 12
Replay Dial-in: +33 (0)1 72 28 01 49 / Code 181955#
Live Webcast Information
To view the video webcast of the press/analyst conference, please visit: http://www.nyse.com/ir
Live Satellite Feed
- Domestic US NTSC - Galaxy 3C - Transponder 3 - Downlink frequency : 3760 Horizontal
- Latin America NTSC - Pan Amsat 9 - Transponder 10c - MCPC CH 6 SA FEC 7/8 SR 27.69 Network ID 5002 Virtual Channel 6 DL Freq: 3880.0 Horizontal
- NE Asia / Australia NTSC - Pan Amsat 8 - Transponder 17c - Slot A SA FEC 2/3 SR 6.62 DL Freq: 4026.5 Vertical
- SE Asia / Australia NTSC - Pan Amsat 2 - Transponder 12c - Slot C SA FEC 2/3 SR 6.62 DL Freq: 4035.5 Horizontal
- Russia, Middle East, Africa NTSC - Pan Amsat 10 - Transponder 16c- Slot B NDS FEC 3/4 SR 6.1113 DL Freq: 3903.5 Vertical
- Europe PAL - Pan Amsat 9 - Transponder 10c- MCPC CH 7 SA FEC 7/8 SR 27.69 Network ID 5002 Virtual Channel 7 DL Freq: 3880.0 Horizontal
- India PAL - Pan Amsat 12 - Transponder 08k- Slot B NDS FEC 3/4 SR 6.1113 DL Freq: 11539.5 Vertical
