Under the proposal, put forward in a report on the future of Euronext by Schneider Electric chairman Henri Lachmann, Euronext would buy the equity trading part of Deutsche Börse (responsible for 20% of its €1 billion revenues) in exchange for shares in Euronext, making Deutsche Börse the largest Euronext shareholder with an estimated 15-20%. A similar deal would see Euronext pay shares for the equity business of the Italian exchange.
Both exchanges would hold onto their existing derivatives businesses.
The triple merger would leave Euronext as the largest stock exchange in Europe, with €4.5 trillion of listed equity.
Euronext said that NYSE had backed the proposal. Deutsche Börse announced its backing last week.
The report argued that a larger Euronext would be able to negotiate better merger terms with the New York exchange. It would "open the way for fresh negotiations with NYSE aimed at a new, broadly based transatlantic alliance better reflecting the relative weight of each market". Discussing the alternative of a straightforward Euronext/NYSE tie-up, it said: "This is not a merger of equals; instead it gives NYSE control."
The week on Risk.net, July 7-13, 2018Receive this by email