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The NYSE Group and Euronext hope to
create the world's largest financial exchange group
by the end of March. Their shareholders voted last
month to approve a plan to combine the two exchange
operators.
The proposed fourteen billion dollar deal will
create the first trans-Atlantic stock exchange.
American and European government officials must
still approve the merger plan.
The new group, to be called NYSE Euronext, will have
a combined market value of about twenty-seven
billion dollars. The deal has been developing since
June.
The New York Stock Exchange is the world's biggest
stock market. Euronext is Europe's leading
international exchange. It operates the stock
markets in Amsterdam, Brussels, Lisbon and Paris.
Germany's Deutsche Borse withdrew its own offer for
Euronext in November.
Financial markets have grown increasingly
international and competitive. The planned merger of
Euronext and the NYSE Group is a good example of
this new climate.
Euronext is itself the product of mergers. The
Amsterdam, Brussels and Paris exchanges joined in
two thousand to create Euronext. It was first traded
publicly in two thousand one, and has since added
other exchanges in Lisbon and London.
In the past, stock markets were organized unlike the
companies they listed. Now many financial markets
operate as publicly traded businesses. That means
they must answer to their own shareholders.
The New York Stock Exchange was a nonprofit
organization that was largely self-supervising.
Then, last March, the NYSE Group was formed as a
publicly traded company. That happened when the Big
Board combined with the electronic trading exchange
Archipelago Holdings.
The Chicago Mercantile Exchange became the first
publicly traded exchange in the United States at the
end of two thousand two.
Some markets have sought to buy or link with other
exchanges. These deals have created bigger markets,
often selling highly complex financial products.
Bigger markets offer more liquidity -- investors
have a greater chance of selling quickly if needed.
NYSE Euronext will trade not only stocks but
options, futures, bonds and more. Total value of the
listed companies? About twenty-six trillion dollars.
The stock prices of the NYSE Group and Euronext both
doubled last year. This has other big exchanges
considering deals of their own. |
