The New York Stock Exchange (NYSE Euronext) and Deutsche Borse yesterday confirmed they will merge, with the aim of become the world’s largest trading venue and dramatically advancing their technological offerings.
The two parties, both big implementers of Linux-based technology, confirmed savings targets of €300 million (£255 million) from IT and other operations, as technology is merged, as well as highlighting increased scale for selling data services to clients. A name for the new group, in which Deutsche Borse shareholders will own 60 percent of the equity, has not yet been given.
In a further sign that technology is at the forefront of changes, the merger will see NYSE Euronext head of technology Dominique Cerutti appointed as president of the combined group, as well as running its systems. Cerutti was formerly European head at IBM Global Services.
The news comes at a time when most of the world’s largest exchanges are in merger talks. The London Stock Exchange, which yesterday set live a new Linux-based matching engine on its main market, remains in “advanced” discussions with Toronto Stock Exchange parent TMX.
The Singapore (SGX) and Australian (ASX) stock exchanges also plan to merge, while the Hong Kong Exchange (HKEx) has said it is open to alliances.
Details of technology plans between NYSE Euronext and Deutsche Borse remain sketchy, though the parties have said they would move to a “common IT infrastructure”. NYSE Euronext is moving its matching engine technology over to its Universal Trading Platform, which itself is based on Linux running on x86 servers. It also runs the Liffe Connect and Unix/Linux based Arca platforms, and its NSC platform operates in a Unix and Linux environment.
Deutsche Borse’s main matching engine, Xetra, runs on Red Hat Enterprise Linux-based servers and uses the IBM WebSphere MQ Low Latency Messaging system.
Last week, NYSE Euronext said it had extended its presence in London, establishing datacentre co-location services in the City, working with host company Interxion. It promised "low latency" trading and data services for customers there.
Reto Francioni, Deutsche Borse CEO and future president of the new group, said of the merger: “Clients will have unparalleled access to markets, products, information, world-class technology, clearing services and settlement – globally and around the clock.”