D. Boerse, NYSE stress European nature of deal in EU letter

Mon Jan 16, 2012 12:54pm EST
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FRANKFURT (Reuters) - Top executives at Deutsche Boerse DB1Gne.DE and NYSE Euronext NYX.N sent a letter to European Commissioners emphasizing the "European" nature of a combined company, in a bid to salvage their deal after antitrust regulators threatened to block it.

The letter was sent by NYSE Euronext Chief Executive Duncan Niederauer and Deutsche Boerse chief Reto Francioni on January 13, and was addressed to European Union Commission President Jose Manuel Barroso and also copied to the remaining 26 commissioners, a copy of the letter seen by Reuters shows.

In it, executives from Deutsche Boerse and NYSE Euronext expressed "profound concern" that blocking the takeover "would represent a serious missed opportunity at a critical juncture for Europe."

Earlier this month, European Commission antitrust regulators signaled they would recommend blocking a merger over concerns about creating a dominant player in derivatives, a source told Reuters.

Deutsche Boerse and NYSE have now focused their efforts to convince the so-called college of 27 commissioners that EU antitrust commissioner Joaquin Almunia's conclusions are wrong, and that approving the deal would help advance EU interests.

"The transaction will facilitate the effective implementation of European Union financial services regulation and offer a unique opportunity to deepen regulatory cooperation and reduce the risk of regulatory arbitrage," the letter said.

"If this combination is prohibited by the College of commissioners, the global consolidation of exchanges might very well shift the balance towards countries favoring 'light touch' regulation, which would severely endanger the European Commission's agenda," the letter continued.

In the letter Deutsche Boerse Chief Reto Francioni and NYSE Euronext head Duncan Niederauer said the new company would be domiciled in the European Union and be strictly under European supervision.

Furthermore, 80 percent of the governance of the company and   Continued...