Reuters reported that last week the acquisition of the
financial services corporation,
NYSE Euronext Inc
) by electronic trading platform
Intercontinental Exchange Inc.
) has been approved by the Securities and Exchange Commission
(SEC). The acquisition was announced in Dec 2012 and was pending
CME GROUP INC (CME): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NYSE EURONEXT (NYX): Free Stock Analysis
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Based on the closing price of $185.80 of ICE on Aug 1, 2013, the
company is acquiring NYSE for a purchase consideration of $10.6
billion, higher than the $8.2 billion takeover price decided
earlier. Through the deal Intercontinental Exchange aims to reach
out to newer markets and diversify among multiple asset classes.
This takeover will unite two leading exchange groups to
ultimately form a diversified global exchange operator. This
amalgamation would mark the evolution of the third largest global
exchange group after Hong Kong Exchanges and Clearing, and
CME Group Inc.
). However, the deal requires approval from European national
regulators before it is finalized. The combined entity is
expected to be better positioned to compete and serve customers
on a large scale.
Upon culmination of the takeover, Euronext, the European
electronic stock exchange of NYSE that operates the Paris,
Amsterdam, Brussels and Lisbon stock exchanges is expected to be
divested. Also, as previously decided, Europe's second largest
derivatives market - NYSE Liffe will be merged into
Intercontinental Exchange Clear Europe. This deal is expecting
culmination in Sep 2013 and is pending regulatory approval from
national regulators in Europe.
The deal is expected to be accretive to Intercontinental
Exchange's 2013 earnings and generate higher returns on invested
capital 2014 onward. Alongside, the company is expected to tap
the promising growth opportunities in the U.S. and European
markets. NYSE being a big name in the market, will give
Intercontinental Exchange an opportunity to take a share of the
pie that the market has to offer. Through the acquisition,
Intercontinental Exchange will also be able to foray into newer
markets and come up with better products and services on a global
platform by utilizing NYSE's expertise and services.
Intercontinental Exchange currently carries a Zacks Rank #3
(Hold). Among other electronic trading platforms,
MarketAxess Holdings Inc.
) carries a favorable Zacks Rank #1 (Strong Buy).