The New York Stock Exchange said its shareholders approved its planned $14.3 billion acquisition of the Paris-based Euronext NV on Wednesday in a deal that would create the first trans-Atlantic securities market and set the stage for further expansion.
The purchase of the European exchange operator is set to be completed during the first quarter of 2007 after getting regulatory approval. The deal is seen as a prelude to an era of cross-border exchanges trading stocks, options and other financial products on a global scale.
John Thain, the 51-year-old chief executive of NYSE Group Inc., said the first order of business will be to integrate the two companies. But he reiterated interest in tapping into the unprecedented growth in Asia by setting up a joint-venture with one of that continent’s major exchanges.
“We’ll be the largest exchange in the world, and in some ways the most powerful exchange in the world,” Thain said after 99.7 percent of shareholders who voted endorsed the deal. Some 75 percent of all investors cast votes on the combination.
“We’re in an era of big global exchanges, and a lot of little ones as well,” he said. “Japan, China, and India are a logical place for another transaction.”
The NYSE vote came a day after it was overwhelmingly approved by the European exchange’s shareholders. It still needs final approval from European market regulators and the Dutch Finance Ministry, as well as the Securities and Exchange Commission and French authorities.
The SEC and Euronext’s five European regulators have already given tentative approval.
Though an Asian expansion could be more than a year away, the company that will adopt the name NYSE Euronext already has another potential deal pending — Borsa Italiana. Earlier this year, Euronext — which operates the Paris, Amsterdam, Brussels and Lisbon stock exchanges — had engaged in discussions with the Italian exchange about becoming part of the NYSE deal.
Both sides never agreed to any terms, but Thain made a point of saying NYSE Euronext will be “more than happy to talk” with them again.
There has been a flurry of activity among stock markets to become publicly traded companies, and not be left behind in a massive consolidation push. Nasdaq Stock Market Inc. launched a hostile bid to acquire the rest of the London Stock Exchange in a deal that values that exchange at $5.3 billion.
Nasdaq is already the London exchange’s biggest shareholder, building a 28.75 percent to essentially block out any other suitors.
NYSE’s pursuit of Euronext was not without criticism as many European investors feared U.S. regulatory encroachment. The Big Board also prevailed over a rival bid from Frankfurt-based Deutsche Boerse AG.
To help make the deal more tantalizing for European investors, Thain agreed last month that the board would be split evenly between U.S. and European directors. The original proposal called for Americans to outnumber Europeans by a 12 to 10 margin.