NYSE Euronext will acquire the privately held American Stock Exchange, and generate $100 million in savings within two years through technology consolidation.
The proposed purchase, which has been approved by both companies’ boards of directors, will boost NYSE Euronext’s scale in US options, exchange traded funds (ETFs), closed-end funds, structured products and cash equities.
In a statement, NYSE Euronext said it expects to save over $100m within two years of closing the deal, by sharing technology, datacentre services and staff, and also consolidating professional and contract services and vendors. Amex will also will relocate its traders to the Nyse's trading floor.
The exchange said the deal will give it a second US option exchange licence and make it the third largest player in the US options marketplace.
NYSE Euronext will pay $260m in NYSE Euronext common stock for the Amex, and Amex members will also be entitled to receive additional shares of NYSE Euronext common stock based on the net proceeds from the expected sale of Amex’s lower Manhattan headquarters.
The acquisition is the first big deal closed by NYSE Euronext CEO Duncan Niederauer, who replaced John Thain in late 2007.
"The addition of the American Stock Exchange to the Nyse Euronext family is highly beneficial for our customers and shareholders, and demonstrates our ongoing commitment to growing our business and product lines," says Niederauer. "This transaction is consistent with our strategic objectives and will strengthen our competitive position in the US, produce significant operational efficiencies, and create new business opportunities."
The deal is subject to approval by Amex members and regulatory bodies, including the US Securities and Exchange Commission and the Department of Justice.