NYSE, Deutsche Deal a 'Springboard' for Asia Expansion: Grasso
By: The NYSE Euronext deal with Deutsche Boerse "represents the future," Richard Grasso, former chairman and CEO of the New York Stock Exchange, told CNBC Thursday.
"The management of NYSE Euronext recognized they needed to further penetrate the derivatives business. The Euronext part of Deutsche Boerse gives them a very important penetration in the European derivatives business," Grasso said.
The shareholders of the NYSE voted in favor of the $9.4 billion takeover by Deutsche Boerse earlier today.
Also, the deal would set NYSE Euronext up to be a part of the "clearance comparison settlement and depository business, and I think [that] creates the springboard for one more piece of the puzzle, which is the Asia-Pacific markets," he explained.
Deutsche Boerse shareholders can tend their offer shares up until July 13, and the deal needs 75 percent of shareholder approval.
"They'd be nuts not to do it," added Grasso. "This is clearly in the best interest of DB shareholders. If they are not able to accomplish this, Deutsche Boerse loses a phenomenal opportunity to be part of the global platform, the global brand in transaction management in technology, in clearance and settlement, in derivatives. It stretches their product base, it's stretches their geography."
Under the deal terms NYSE shareholders will receive 0.47 shares of the new company for every shareholder, while shareholders of DB who tender the shares will receive one share for every share held. The exact percentage of ownership from both sides depends on the number of DB shareholders who tender their shares.
Regulatory approval is required from US and European regulators. The deal is not likely to close until the fourth quarter at the earliest; early 2012 is more likely.
Follow Strategy Session on Twitter: @CNBCStrategy
Follow David Faber on Twitter: @DavidFaberCNBC
Watch CNBC's "The Strategy Session" weekdays at Noon ET.