NYSE Euronext (NYX) Thursday moved a step further in its bid to merge with Deutsche Böerse AG (DBOEF.PK, DBOEY.PK) after the Antitrust Division of the US Department of Justice cleared the proposed combination.
The clearance comes after the DOJ entered into a consent decree with the two companies, while stipulating the minority-stake sale of International Securities Exchange, a part of Deutsche Boerse, in Direct Edge Holdings LLC.
The companies will have at least two years after the closure of the proposed merger to sell the 31.54 percent minority stake that International Securities Exchange owns in Direct Edge Holdings.
The completion of the combination is still subject to further conditions, including approvals by the European Commission.
Last February, NYSE and Deutsche Boerse agreed to a proposed merger in what will be the world's biggest stock and derivatives exchange upon completion. As per the deal, each NYSE Euronext share was to be converted into 0.47 of a share of the new company.
In August, the European Commission initiated a Phase II review of the proposed transaction, and in October, EU officials formally objected to the deal.
Media reports in November had said both companies offered initial remedial measures including sale of overlapping parts of their single-stock equity derivatives businesses in key markets. They also proposed to give new, innovative rival products access to Deutsche Boerse's Eurex derivatives clearing house.
Recently, NYSE Euronext and Deutsche Böerse submitted revised remedies to the European Commission to address remaining concerns on the proposed merger, while preserving the rationale of the transaction.
The companies buttressed their original proposal regarding European single equity derivatives by increasing the assets to be included in the divestiture, while providing the buyer of that business with option to access Eurex Clearing for single equity derivatives.
The Commission is now set to complete its review by February 9, 2012, and the companies anticipate closing the deal shortly thereafter in early 2012.
Once the merger closes, Deutsche Boerse shareholders would own over 60 percent of the combined entity, while the remaining will rest with the NYSE Euronext. Based on 2010 figures, the companies combined for revenues of $5.4 billion.
NYX is trading at $26.34, up $0.37 or 1.42%, on a volume of 2.3million shares on the NYSE.
On Frankfurt's Xetra exchange, Deutsche Boerse shares closed Thursday at 42.45 euros, down 0.31 euros or 0.74%.
Deutsche Boerse's OTC stock DBOEY.PK is trading at $5.52, up $0.07 or 1.28%, while DBOEF.PK closed last Tuesday at $55.25.
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