On the face of it, it looks like a German company is buying an icon of American capitalism: the New York Stock Exchange.
The reality is a little more complex.
For one thing, two of Deutsche Boerse AG's largest shareholders are American.
Also, the parent company of the New York Stock Exchange isn't entirely American. NYSE Euronext Inc. was formed in a merger between the NYSE and a group of European exchanges in 2007. Euronext itself was created in 2000 from the combination of stock markets in Paris, Brussels and Amsterdam.
Welcome to the global financial world. The proposed merger of Deutsche Boerse and NYSE Euronext would create a worldwide owner of financial markets that would be incorporated in the Netherlands. The new company would have dual headquarters in New York and Frankfurt.
"The deal reflects the global realities of today," said Saikat Chaudhuri, assistant professor of management at The Wharton School of business.
NYSE Euronext is already global. U.S. stock and derivatives trading contribute only 14.4 percent of its revenue, while 34.6 percent comes from European trading. The rest comes from listing and technology alliances with partners such as the Tokyo Stock Exchange and the Hong Kong Stock exchange. NYSE Euronext represents stock and derivatives exchanges based in six different countries.
Similarly, Deutsche Boerse owns the American options exchange International Securities Exchange. It also shares the ownership of derivatives exchange Eurex with the Swiss Exchange. Five of its 10 largest shareholders are American, according to information provider FactSet. Franklin Mutual Advisers owns 4.2 percent of Deutsche Boerse, while Capital Research owns 2.9 percent. Both investors are based in California.
Like the exchanges they're listed on, U.S. companies are also increasingly doing business overseas. According to Standard & Poor's, about half of the revenue of the U.S. companies in the S&P 500 index come from overseas, compared with 30 percent in 2000.
"By building a global exchange they are in a better position to take advantage of increasingly global firms that want to be listed in multiple countries," said Chaudhuri.
The merger agreement announced Tuesday must still be approved by shareholders of both companies and regulators in the U.S. and Europe.
While catering to the increasingly global reach of their clients played a role in their decision to merge, so did saving costs. Some of NYSE and Deutsche Boerse's largest competitors are computerized stock exchanges that allow sophisticated investors to profit from minuscule price changes in trading that takes place in milliseconds.
NYSE wouldn't be the first iconic American company to be acquired by a European firm in recent years. Anheuser-Busch, which makes Budweiser beer, was acquired by Belgian-Brazilian brewer InBev in 2008.
The globalization trends that are driving these cross-border deals tend to make politicians nervous. They worry about the loss of national and local identity. New York's Democratic Senator Charles Schumer pushed to have NYSE as the first name of the combined company to emphasize its stature as the center of the global financial world.
"Some may say, what's in a name, but I say, a lot. The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger," Schumer said in a statement. "The New York Stock Exchange is the cradle of American capitalism. It is a national treasure."
So far, the new company hasn't been named.