10 Percent Implied Premium in NYSE Merger

NYSE Euronext and Deutsche Boerse are days away from finalizing a mergerunder which Deutsche Boerse would exchange its shares for NYSE shares at an implied premium of roughly 10 percent, according to people close to the deal.

NYSE trader
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NYSE trader

The ratio has yet to be set and shares of NYSE are trading above that premium, perhaps reflecting the cost savings and possible synergies that such a global link-up would bring.

The two companies, which have acknowledged advanced merger discussions, are said to be very far along in those discussions and have resolved key issues such as management, corporate headquarters and the split of the combined company’s executive committee.

While the deal has many of the characteristics of a merger of equals, given Deutsche Boerse is the larger entity, it is going to be the acquirer, a fact that may rub politicians or regulators the wrong way.

The two companies had talks about a merger at the end of 2008 and have been “in touch” regularly since then, according to people close to the talks.

This time, barring unforeseen impediments, the two companies are highly likely to conclude those talks with a deal.

Advisors to Deutsche Boerse are Deutsche Bank and JP Morgan and for NYSE, Perella Weinberg.

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