Deutsche Boerse AG, operator of the Eurex futures platform and Frankfurt Stock Exchange, agreed to buy New York Stock Exchange parent NYSE Euronext in a $9.53 billion all-stock deal that creates the world's largest owner of equities and derivatives markets.
Deutsche Boerse will swap one share of its own stock for one share in the new company, while every NYSE Euronext share will be converted into 0.47 share, according to a statement Tuesday. Deutsche Boerse will control 60% of the new corporation. Reto Francioni, the CEO of Deutsche Boerse, will serve as chairman; and Duncan Niederauer, CEO of NYSE Euronext, will serve as CEO of the combined organization.
Deutsche Boerse will get 10 of 17 seats on the combined company's board, according to the statement. The deal values NYSE Euronext at 8.3 times earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg.
While the merged entity will list corporations with about $15 trillion in value, more than any other exchange, what may prove more lucrative is ownership of growing venues for trading futures and options, said Rich Repetto, an analyst at Sandler O'Neill & Partners.
About 37% of revenue at the joined company will come from derivatives trading and clearing, making it the largest unit based on 2010 revenue, according to the statement. Cash listings along with trading and clearing accounted for 29%, settlement and custody made up 20%, and market data and technology services was 14%.
The U.S. Department of Justice and Securities and Exchange Commission will have to sign off on the transaction.