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EU Prohibits NYSE Euronext & Deutsche Boerse Merger

NEW YORK CITY-In light of the European Commission’s decision, both companies are in discussions to terminate their merger agreement. Following the termination, NYSE Euronext will resume a $550 million share repurchase program to return capital to shareholders.

By Jacqueline Hlavenka | Updated on February 01, 2012

NEW YORK CITY-The European Commission has blocked the proposed merger between NYSE Euronext and Frankfurt-based Deutsche Borse on Wednesday morning, citing concerns that the combination would have resulted in a “quasi-monopoly” throughout the global exchange market. In light of the decision, both companies are in discussions to terminate their merger agreement.

The $9.5 billion, all-stock deal would have given Deutsche Boerse majority ownership of the combined company. Though the deal gained approval by the boards of directors at both companies, the EU’s investigation showed that “new competitors would be unlikely to enter the market successfully enough to pose a credible competitive threat to the merged company.” The commission’s analysis focused on the effects of the merger on the markets for European financial derivatives traded on exchanges, noting that the benefits of price competition would have been “taken away” from customers.

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