NYSE Merger 'Far From Done Deal': Economist
The plan to merge Deutsche Boerse with NYSE Euronext is “far from a done deal,” Benn Steil, a senior fellow at the Council of Foreign Relations and director of International Economics, told CNBC Tuesday.
However, Terry Duffy, executive chairman of the CME Group said selling the NYSE in pieces is harder than it looks.
Said Steil: “In this particular case, the parts may be greater than the sum. There will be other players, particularly in the US, who would love to get their hands on pieces of the NYSE transatlantic franchise.
“For example, the Intercontinental Exchange may be very interested in the life futures business, if CME is not interested. Nasdaq would be interested in the NYSE’s US cash equities business and the Euronext’s European equities business.”
Deutsche Boerse and NYSE Euronext announced the creation of the world’s largest exchange operatoron Tuesday. If the deal goes through, 60 percent of the group will be owned by Deutsche Boerse shareholders and the remainder by NYSE investors.
However, some prominent business and political leaders are lukewarm on the merger, including Sen. Charles Schumer, (D-NY), who is a member of the Senate’s Banking Committee, which oversees financial transactions. Others are completely opposed to it.
Duffy, who declined to discuss whether the CME was interested in parts of the NYSE, said because of regulatory hurdles coming from the US Justice Department and individual European entities, doesn't think it’s “realistic” take the NYSE apart.
Duffy, whose CME handled a consolidation in 2006 and 2007, said the NYSE-Deutsche tie-up wasn’t “surprising,” as consolidations come in waves.
Steil said the next wave would be in emerging markets, although not immediately, and it will take “hard pushing” to get there.