Deutsche Boerse AG moved into pole position to win NYSE Euronext after Nasdaq OMX Group and IntercontinentalExchange Inc withdrew their bid for the rival exchange on Monday. Nasdaq and its co-bidder ICE ditched their $11 billion offer for NYSE Euronext after US antitrust regulators made it clear they won''t let the deal go through, highlighting the fragility of dealmaking in the closely regulated exchanges industry, as pressure to consolidate mounts.
The withdrawal could also further complicate an already convoluted global merger dance in the exchanges sector, as rival bidders and nationalist concerns throw a monkey wrench into one consolidation attempt after another. A group of Canadian banks and pension funds announced their intention on Sunday to derail another major deal in the sector, launching a rival offer to the London Stock Exchange''s bid for TMX Group.
Some experts said LSE and Nasdaq could seek to pursue a deal with each another. "LSE will look towards Nasdaq if it does not get a deal with TMX. Nasdaq does not bring derivatives, but it is a more attractive option (for LSE) than ICE," a banker familiar with the exchanges industry said. Nasdaq tried to buy the LSE twice during a previous wave of dealmaking a few years ago, but was thwarted on both occasions by shareholders. Previous approaches to the LSE by Deutsche Boerse, NYSE and Macquarie also failed.
Deutsche Boerse shares rose 3.8 percent as traders cheered its better growth prospects. Shares in LSE gained 6.8 percent, with markets factoring in a higher chance that the British stock exchange could now seek solace in the arms of Nasdaq. NYSE shares fell 10.7 percent. Nasdaq was up 0.6 percent and ICE was up 6.0 percent.
stranglehold on US listings, and the US Justice Department said if the bid had not been abandoned, Justice would have filed a lawsuit to stop it. Nasdaq CEO Bob Greifeld said his company was "surprised and disappointed" with the decision by antitrust regulators.
Greifeld said it became clear that regulators would not give the go-ahead for a deal despite Nasdaq and ICE offering a variety of remedies to address antitrust concerns. Nasdaq and ICE were also seeking a speedy regulatory review, and one expert said that might have gone against them. "Any time you push the government for a quick decision, you can expect something like this," said antitrust expert Andre Barlow from the law firm Doyle, Barlow and Mazard.
Other deals struck in the recent global exchanges consolidation frenzy have also run into trouble over nationalist or regulatory concerns. Singapore Exchange last month had to abandon its deal with Australia''s main exchange after it was rejected on nationalistic grounds. Nasdaq and ICE first announced their intention to buy the New York Stock Exchange''s parent on April 1, seeking to thwart NYSE Euronext''s proposed friendly merger.
If successful, Deutsche Boerse''s deal with NYSE Euronext would see the German operator emerge as a global powerhouse and force rivals to scale up in order to stay in competition. "The fact that Nasdaq and ICE are withdrawing their offer for NYSE is no surprise - it became clear already that the offer wouldn''t be successful. It''s good news for Deutsche Boerse," said Konrad Becker at Merck Finck.
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