Bloomberg News

Deutsche Boerse to Focus on New Services, Regions for Growth

February 14, 2012

Feb. 14 (Bloomberg) -- Deutsche Boerse AG, blocked from buying NYSE Euronext by European competition regulators this month, will seek to grow by pushing services to unregulated markets, boosting revenue from technology and market data and tapping into new geographical areas.

“We are channeling our energies in three directions,” Reto Francioni, chief executive officer of the exchange, said at a press conference in Frankfurt today. “We will further scale up spending on growth initiatives and infrastructure in 2012.”

The exchange yesterday pledged to return capital to shareholders after posting a fourth-quarter profit. Deutsche Boerse proposed paying a dividend of 3.30 euros a share, comprising a special dividend of 1 euro and a regular dividend of 2.30 euros, and said it will spend as much as 200 million euros ($263 million) on buybacks in the second half of 2012.

Both NYSE Euronext, which last week reported income that beat forecasts, and Deutsche Boerse are shifting their strategy to expanding current operations after the European Commission blocked their merger. Deutsche Boerse agreed to buy its New York-based rival in a deal valued at $9.53 billion when it was announced last February.

“In times such as these, companies have no time for dwelling on missed opportunities,” Francioni said today. “We must look for new opportunities and capitalize on them. We are reserving the right to take legal steps against the prohibition of the merger by the Commission.”

EU Veto

On Feb. 1, European Union regulators vetoed a plan to create the world’s biggest exchange, after concluding that the merger would hurt competition. Deutsche Boerse called it “a black day for Europe and for its future competitiveness.”

The deal would have led to a “near-monopoly” in European exchange-traded derivatives, uniting both Eurex, the region’s largest derivatives exchange, and NYSE Euronext’s Liffe, the second-largest. Any savings would “not be substantial enough to outweigh the harm to customers caused by the merger,” the European Commission said.

“We are not focusing on large-scale mergers and takeovers,” Francioni said today.

--Editor: Andrew Rummer

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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