Deutsche Boerse AGs management is submitting a proposal to its supervisory board to bid $2.6 billion for International Securities Exchange, the largest U.S. equity options exchange, according to a Deutsche Boerse statement. The proposed merger would involve Eurex.
The ISE confirmed in another statement that it is in advanced discussions that could lead to a possible business combination with Eurex. The transaction is still subject to the negotiation of final terms and documentation as well as approval by ISEs board of directors.
The deal makes sense to us in that it would allow Deutsche Boerse to gain entry into the U.S. markets without expending too much capital, Banc of America Securities analyst Christopher Allen said in a note to clients, adding this should help Nasdaq, which is anxious to execute a transatlantic combination and holds a stake in the London Stock Exchange, a long-time target of Deutsche Boerse.