NEW YORK - Nasdaq and IntercontinentalExchange Monday withdrew their joint bid of $ 11 billion for the parents of the New York Stock Exchange after the U.S. Department of Justice has advised the companies that it would continue a suit to block the agreement.
"NYSE and Nasdaq are emblematic... they are fierce competitors, said Christine Varney, Deputy Prosecutor General of the antitrust division of the Department of Justice, in a conference call." If these two competitors had merged it would have effectively created a monopoly leading to higher prices, lower service and less innovation. ?
The decision of the two exchanges of back clears an obstacle to the agreement of 10 billion previous NYSE Euronext Inc. to combine with the German exchange operator Deutsche Boerse. The withdrawal of the candidature of competitor, it is likely that the German exchange feel obliged to raise its bid lower.
NYSE Euronext shares dropped $5.16, or 12.6% to $35.73.
Shares in Nasdaq OMX Group Inc. also fell 68 cents to $alcohol, whereas that based at Atlanta IntercontinentalExchange Inc. won $3.90, or 3.3%, to $122.22.
Varney noted that 100% of the top 500 companies based in the United States are listed on the NYSE or Nasdaq. The merger would substantially eliminated competition for these actions listing services and other data products.
Although the Nasdaq and NYSE are the two largest stock markets in the United States, the two were under immense pressure to find a merger partner. This is because the technology was a decline in the cost of trading to almost nothing. Newer, smaller companies and more high technology such as Exchange and Direct Edge bats have emerged to allow investors to find the best price for a security in milliseconds. Taking business away NYSE and Nasdaq.
In addition, stocks are a small part of the business. Exchanges are more of their money options and complex investments known as derivatives. In response, major exchanges in the world have been combined with the other. In February, the stock exchange of London and the parent company of the Toronto Stock Exchange announced the merger of $ 2.9 billion, and the exchange of Singapore and the Australia ASX revised its own plan of $ 8.3 billion merger.
NASDAQ OMX CEO Bob Greifeld, said in a statement Monday that the companies had offered a variety of "substantial remedy" to try to obtain regulatory approval, including the sale of the NYSE self-regulatory organization and its related companies.
"While we are surprised and disappointed by the result of the antitrust division, some of the uncertainty, at least with regard to our joint proposal, has been resolved," he said.
Council of NYSE Euronext has twice rejected the Nasdaq bid and ice for the offer of Deutsche Boerse despite the lower price.
In a statement, Duncan Niederauer, CEO of NYSE Euronext, continued to spread the benefits of the transaction. "As we have consistently maintained it, the combination with Deutsche Boerse creates Exchange group the Prime Minister of the world - a business geographically through multiple categories of assets will create compelling value for our shareholders long term."
In a statement separate Deutsche Boerse said that it is moving forward with the planning of the integration.
NYSE Euronext shareholders are scheduled to vote in early July on the agreement with the German company.
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