Deutsche Boerse, NYSE already global

Associated Press

NEW YORK

On the face of it, a German company is buying an icon of American capitalism.

The reality of Deutsche Boerse AG’s proposed acquisition of the New York Stock Exchange is a little more complex.

For one thing, two of Deutsche Boerse’s largest shareholders are American.

Also, the parent company of the New York Stock Exchange isn’t entirely American. NYSE Euronext Inc. was formed in a merger between the NYSE and a group of European exchanges in 2007. Euronext itself was created in 2000 from the combination of stock markets in Paris, Brussels and Amsterdam.

Welcome to the global financial world. The proposed merger of Deutsche Boerse and NYSE Euronext would create a worldwide owner of financial markets that would be incorporated in the Netherlands. The new company would have dual headquarters in New York and Frankfurt.

“The deal reflects the global realities of today,” said Saikat Chaudhuri, assistant professor of management at The Wharton School of business.

NYSE Euronext already is global. U.S. stock and derivatives trading contribute only 14.4 percent of its revenue, while 34.6 percent comes from European trading. The rest comes from listing and technology alliances with partners such as the Tokyo Stock Exchange and the Hong Kong Stock exchange. NYSE Euronext represents stock and derivatives exchanges based in six different countries.

Similarly, Deutsche Boerse owns the American options exchange International Securities Exchange. It also shares the ownership of derivatives exchange Eurex with the Swiss Exchange. Five of its 10 largest shareholders are American, according to information provider FactSet. Franklin Mutual Advisers owns 4.2 percent of Deutsche Boerse, while Capital Research owns 2.9 percent. Both investors are based in California.