NYSE and Euronext agree merger terms

The New York Stock Exchange and the European exchange operator Euronext have agreed a $20 billion merger.

The new company will be named NYSE Euronext, a US-based holding company listed in New York and Paris. Together, the exchanges will have an average daily trading volume of $100 billion, the companies said. The US headquarters will be in New York, with international activities based in Amsterdam and derivatives in London.

NYSE Group has offered Euronext shareholders the right to exchange each of their shares for 0.980 shares of a newly created NYSE Euronext stock and €21.32 in cash, valuing the European company at $10 billion. Euronext will also pay out a previously announced €3 special dividend.

The companies believe the merger will bring savings of $375 million in economies of scale from rationalising IT systems and trading platforms.

Euronext's chairman, Jan Michiel Hessels, will become chairman of the merged company, with NYSE chairman Marshall Carter as his deputy. John Thain, NYSE's chief executive, will fill the same role after the merger, with Euronext chief executive Jean-Francois Theodore as deputy chief executive.

NYSE says it expects to launch the exchange offer within the next six months, following shareholder approval and regulatory clearance.

Euronext provides services for regulated stock and derivatives markets in Belgium, France, the Netherlands and Portugal. It also owns the Euronext.Liffe derivatives exchange in London.