IntercontinentalExchange, the 12-year-old energy and commodity futures bourse, agreed to acquire NYSE Euronext for cash and stock worth $8.2 billion, moving to take control of the world’s biggest equities market.
ICE, based in Atlanta, will pay $33.12 a share for the owner of the New York Stock Exchange, 38% above Wednesday’s closing price, according to a statement Thursday. Both boards approved the proposal, and the companies expect to complete the transaction in the second half of 2013.
Last year, the U.S. Justice Department blocked a joint hostile bid by ICE and Nasdaq OMX Group for the New York-based company on concern the combination would dominate U.S. stock listings.
Merging NYSE Euronext, which owns the biggest exchanges by value of listings in the U.S., France and the Netherlands, with the second-largest futures market underscores both the growing importance of derivatives and the diminishing influence of the 220-year-old NYSE. The Big Board, once the benchmark for global free markets, has seen its share of trading in stocks listed on the exchange decline to 21% from 82%.
Jeffrey Sprecher, CEO of IntercontinentalExchange, will head the combined company, with NYSE CEO Duncan Niederauer becoming president. The companies plan to explore an initial public offering for NYSE’s European equity unit.
Mr. Sprecher joined Nasdaq OMX CEO Robert Greifeld in an unsolicited bid for NYSE Euronext in April 2011. The offer, scuttled by the Justice Department seven weeks later, sought to derail NYSE’s pending merger agreement with Deutsche Boerse.
The merger with Deutsche Boerse was rejected by European competition authorities in February. NYSE Euronext subsequently began a cost-cutting plan known as Project 14 and said on Nov. 6 that it generated savings of $82 million so far this year, 33% of the total $250 million expected by the end of 2014.
In addition to the New York Stock Exchange, the company operates bourses in Paris; Lisbon, Portugal; Brussels and Amsterdam; and London-based Liffe, Europe’s second-largest derivatives market. NYSE’s adjusted earnings were $653 million in 2011 on revenue of $4.6 billion. The company posted profit of $357 million in the nine months through Sept. 30, down 32% from the same period last year.
Intercontinental offers contracts based on European energy commodities such as Brent crude, natural gas and heating oil at its London-based ICE Futures Europe exchange. In the U.S., it offers futures on agricultural commodities such as coffee, cocoa and sugar as well as Russell stock indexes and currencies at ICE Futures U.S. The company owns the world’s largest clearinghouse for credit-default swaps, ICE Clear Credit.