Two centuries of independence for the New York Stock Exchange are set to come to an end after its operator, NYSE Euronext, agreed to sell itself to Inter-continentalExchange, the commodities-focused markets business, in an $8bn (£5bn) deal.
In all, the combined stock market behemoth will own 14 exchanges, along with five clearing houses, giving ICE the heft to go head to head with larger rivals such as CME, which runs derivatives and futures exchanges in New York and Chicago, and the Frankfurt-based Deutsche Börse, whose own gambit to join forces with NYSE Euronext was thwarted by European competition regulators.
The $8.2bn cash and stock deal values NYSE Euronext shares at $33.12 each.
While Deutsche Börse ran into a regulatory wall, ICE, which previously jointed with NYSE rival Nasdaq OMX in a failed hostile bid for the business, is expected to have no such problems, with analysts saying there is less of an overlap between the constituent businesses. ICE's bread and butter is commodities, while NYSE specialises in stocks and derivatives. The latter – NYSE's derivatives arm and in particular its London-based Liffe futures market – is seen as key to ICE's interest.
Also known as the Big Board, the Manhattan exchange is one of the central cogs of global capital markets and has been a mainstay of the Wall Street financial district for more than two centuries.
ICE, compared with the long and storied history of the NYSE, is a relative upstart, having been founded in 2000 in Atlanta. But its core business of commodity trading and energy futures has fared well thanks to the surge in demand for resources. Along the way, it has boosted itself with deals – for example, buying the London-based International Petroleum Exchange, home to Brent crude.
Euronext also operates exchanges in France, Belgium, Portugal and the Netherlands.
ICE's chief executive, Jeff Sportier, will be chief executive of the enlarged business, while the current head of NYSE Euronext, Duncan Niederauer, is to become president of the combined entity.