Bloomberg News

NYSE Euronext May Seek EU Hearing to Defend Deutsche Boerse Deal

October 12, 2011

Oct. 12 (Bloomberg) -- NYSE Euronext Chief Executive Officer Duncan Niederauer said the company may ask for an oral hearing with European Union regulators in late October to defend its planned combination with Deutsche Boerse AG.

The operator of the New York Stock Exchange will spend the next two weeks responding to the EU’s so-called statement of objections, which is more than 100 pages long, Niederauer said in a transcript of a video message to employees filed with U.S. regulators. “We are likely to request an open hearing and attend that in late October, and then I think we’ll know where we stand a lot more by the end of this month,” Niederauer said.

The statement sent last week to the two exchanges from Brussels-based regulators is the most recent step in a process that started June 29 when the companies sought approval to merge, having announced their plans in February. The European Commission has said it will conduct an expanded probe and set a Dec. 13 deadline to give its final opinion. NYSE is “very close to making some key decisions” on the integration and is ahead of schedule, Niederauer said in the video message.

European antitrust regulators are studying how Deutsche Boerse’s takeover of NYSE Euronext will affect derivatives trading, clearing and index licensing, three people with direct knowledge of the review said this week.

Almunia Concern

Joaquin Almunia, the EU’s antitrust commissioner, has expressed concern that the deal may monopolize the derivatives market. Regulators have also cited speculation that the merger will lead to reduced innovation in derivatives products and technology and less competition for post-trade clearing services. Deutsche Boerse’s “vertical silo,” which routes all trade clearing through its own services, was targeted by Almunia in March. He said he preferred a “more open business model” for markets.

“What this document articulates is the issues and concerns that they still have with the deal,” Niederauer said. “So the good news is anything not mentioned in the statement means they’re satisfied that if we put the two companies together, there’s no issue with those parts of the business.”

The three months ended Sept. 30 were “quite a strong quarter,” compared with comparable periods, Niederauer said, adding that volumes were “all very, very strong.” NYSE is due to report third-quarter earnings on Nov. 3.

--Editors: Andrew Rummer, Peter Chapman

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net; Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net


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