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FIRST ON CNBC: CNBC TRANSCRIPT: NYSE EURONEXT CEO DUNCAN NIEDERAUER SPEAKS WITH CNBC'S "SQUAWK ON THE STREET" TODAY

Duncan Niederaurer
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Duncan Niederaurer

WHEN: Today, February 15, 2011

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a FIRST ON CNBC interview with NYSE Euronext CEO Duncan Niederauer today, February 15th on CNBC's "Squawk on the Street."

All references must be sourced to CNBC.

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MARK HAINES: WE ARE BACK. THE NYSE-DEUTSCHE BORSE DEAL IS DONE. BOARDS APPROVED. NOW WE ARE GOING TO TALK TO THE MAN WHO WILL GO DOWN IN HISTORY AS THE MAN WHO SOLD AN ICONIC AMERICAN INSTITUTION TO A BUNCH OF FOREIGNERS. GOOD MORNING, SIR.

DUNCAN NIEDERAUER: WOW, MARK, THANKS FOR THAT INTRO. APPRECIATE IT. YOU KNOW WHAT I LOVE ABOUT YOU GUYS? IT'S ALWAYS ABOUT THE STORY. SO I HATE STARTING WITH WHAT IT ISN'T BUT I'M GOING TO START WITH THAT. IT ISN'T A SALE. OBVIOUSLY, THEIR MARKET CAP IS BIGGER. WE ALL KNOW THAT, FROM SOME OF THE POINTS THAT BOB MADE EARLIER THIS MORNING LIKE SOME OF OUR BUSINESSES ARE TOUGH. WE ARE TRADING FROM STRENGTH, WE'VE BUILT BUILT A NICE BUSINESS. WE'VE REPOSITIONED THE COMPANY. OBVIOUSLY THEY GET MORE OF THE EQUITY IN THE COMPANY. BUT AS BOB WAS MENTIONING THIS MORNING, MANAGEMENT IS 50/50. I'M THE CHIEF EXECUTIVE. BOARD IS SPLIT IN LINE WITH OWNERSHIP. AND THE NAME WILL NOT BE DBNYSE GROUP AND NEWCO WILL BE OWNED 55% BY U.S. SHAREHOLDERS DOESN'T SOUND LIKE A TAKEOVER TO ME. SO WE'VE GOT TO STOP POSITIONING IT THAT WAY.

HAINES: I'VE GOT TO SAY, THAT WAS A GREAT SPIN JOB.

BOB PISANI: IT WAS VERY GOOD.

NIEDERAUER: BUT IT WAS ACTUALLY ALL TRUE.

ERIN BURNETT: SO 60% OF THE SHARES --

NIEDERAUER: SO THE BOARD IS 60/40, THEIR SIDE, OUR SIDE. BUT THE SHAREHOLDER BASE IS 55% -- WE'RE BOTH VERY INSTITUTIONAL SHAREHOLDER-BASES. SO THE SHAREHOLDER BASE 55% U.S., 11% GERMAN, 11% UK AND 25% IS THE REST OF THE WORLD. SO IT'S A VERY BALANCED INSURANCE INSTITUTIONAL-BASED.

BURNETT: WHICH BANK SHAREHOLDERS WILL GET 60% OF THE COMPANY SO WHETHER THEY THEY ARE AMERICAN, GERMAN OR WHATEVER THEY WILL GET 60% OF THE VOTE?

NIEDERAUER: THAT'S RIGHT. THEIR BIGGEST SHAREHOLDERS ARE PEOPLE LIKE FIDELITY, TROW--

PISANI: SO YOU'VE GOT THE DEAL DONE, NOW THE PR IS GOING TO START. IT'S STARTING RIGHT HERE.

NIEDERAUER: RIGHT.

PISANI: SO CAN YOU EXPLAIN TO OUR VIEWERS EXACTLY WHY THE DEAL WAS DONE AND A LITTLE BIT ABOUT WHAT THE ECONOMICS OF STOCK TRADING ARE LIKE TODAY SO PEOPLE CAN UNDERSTAND WHAT DROVE YOUR DECISION MAKING?

NIEDERAUER: LET'S START WITH THE SECOND PART OF THE QUESTION FIRST. YES, THE ECONOMICS OF STOCK TRADING ARE MORE COMPETITIVE THAN IN OTHER PARTS OF THE BUSINESS. SO IF YOU THINK ABOUT THIS COMBINATION, RIGHT, YOU'VE GOT OUR BRANDON THE LISTINGS AND EQUITY SIDE AND YOU'VE GOT OUR LEADERSHIP IN THE U.S. OPTIONS BUSINESS, YOU'VE GOT OUR GROWING TECHNOLOGY SERVICES BUSINESS, YOU'VE GOT OUR COMBINED STRENGTH IN DERIVATIVES AND DEUTSCHE BORSE'S STRENGTH IN THE SORT OF POST-TRADE SERVICES BUSINESS AND THE ANALYTICS BUSINESS. I DON'T SEE HOW YOU COULD BUILD A MORE DIVERSIFIED EXCHANGE GROUP.WE THINK WE'RE REDEFINING A CATEGORY. I HAVE NEVER THOUGHT THE FUTURES OF EXCHANGES WAS ABOUT TRADING EQUITIES. AND THE DEVELOPED MARKETS JUST AS YOU GUYS KNOW THAT'S AN INTENSELY COMPETITIVE BUSINESS. I THINK THIS POSITIONS US TO BE AS BIG AS SOME OF THE BIG GUYS WE COMPETE WITH GLOBALLY. IT IS THE U.S. AND NEW YORK LEADING FROM THE FRONT AGAIN. WE NOW CREATE THE FIRST DIVERSIFIED EXCHANGE AND IT GIVES US OPPORTUNITY TO CONTROL OUR DESTINY GOING FORWARD.

PISANI: THE POINT IS THOUGH THE CASH EQUITIES BUSINESS HAS BECOME A COMMODITIES BUSINESS. IT'S A SCALE BUSINESS AND IT NEEDS TO GET BIGGER TO COMPETE AND SURVIVE IN THAT AND THE GROWTH AREA IS IN THE FUTURES AND IN THE OPTIONS AREA AND HERE YOU'RE GOING TO BE A POWERHOUSE.

NIEDERAUER: YES. AND IF YOU THINK ABOUT IT, WHAT I'VE SAID FOR TWO YEARS IS EXCHANGES SHOULD BE COMPETING ACROSS THE VALUE CHAIN. NOT JUST WHERE BUYERS AND SELLERS MEET TO TRADE EQUITIES THIS PLACE ISN'T GOING ANYWHERE. WE ARE NOT CRAZY. THIS IS AN ICON. WE'RE NOT CHANGING THE NAME OF THE NYSE. WE'D OUT OF OUR MINDS. IT IS A FANTASTIC BRAND. HOWEVER, WE HAVE TO BE COGNISANT IT IS A BIG BUSINESS GLOBALLY AND IF YOU THE CONNECTIVITY BUSINESS WE HAVE, THE TRADING BUSINESS, THE DERIVATIVES BUSINESS WE HAVE, AND THE LISTINGS BUSINESS WE HAVE AND ANOTHER IPO TODAY. THE DERIVATIVES BUSINESS THE COMBINED COMPANY WILL HAVE AND THE POST-TRADE BUSINESS THAT IS REDEFINING THE CATEGORY GOING FORWARD IN OUR MIND.

BURNETT: IS THERE GOING TO BE A RIVAL BID?

NIEDERAUER: YOU SAW THE SAME RUMORS WE SAW. YOU SAW THE SUBSEQUENT STATEMENT.

BURNETT: WELL YOU KNOW WHETHER THEY ARE RUMORS OUR NOT

NIEDERAUER: I WILL TELL YOU, IT'S JUST A RUMOR. THERE IS NOTHING TO RESPOND TO. WE JUST SIGNED A DEAL WITH A GREAT PARTNER AND WE'LL DEAL WITH THAT, WHEN AND IF IT WILL HAPPENS.

HAINES: YOU SAID YOU WILL CONTROL YOUR OWN DESTINY. BUT WITH ONLY SEVEN OF THE 17 BOARD SEATS, I DON'T SEE HOW THAT HAPPENS.

NIEDERAUER: I MEANT THE COMPANY WILL CONTROL OUR OWN DESTINY ABOUT WHERE WE GO FORWARD. NOW IF THIS WILL MAKE YOU FEEL BETTER, SINCE I SEE MARK TRYING TO SPIN OFF A STORY HERE, REMEMBER --

HAINES: WHAT?

NIEDERAUER: THE ASSUMPTION MY FRIEND, IS THAT ALL SEVEN BOARD MEMBERS ARE AMERICAN AND ALL TEN OF THEIRS ARE GERMAN. THAT'S A PATENTLY FALSE STATEMENT. WE HAVE AN INTERNATIONAL BOARD, THEY HAVE AN INTERNATIONAL BOARD. I WOULD SAY GERMANY AND THE U.S. WILL BE TWO COUNTRIES WITH THE MOST MEMBERS ON THE BOARD, BUT WHO KNOWS WHERE WE GO WITH THE BOARD STRUCTURE FROM HERE.

HAINES: DO YOU HAVE AT LEAST CC SABATHIA BAILOUT CLAUSE?

NIEDERAUER: YOU MEAN CAN I BREAK MY CONTRACT? WE HAVE LIKE ANY DEAL WOULD HAVE BETWEEN NOW AND CLOSING IF SIGNIFICANT EVENTS TAKE PLACE EITHER ONE CAN TERMINATE THE DEAL. THAT'S NOT GOING TO HAPPEN. THIS IS A GREAT COMBINATION. WE'RE ALL GOING TO SIGN CONTRACTS TO KEEP THE SHAREHOLDERS SATISFIED AND WE'LL DELIVER ON THE PROMISES THAT WE'RE GOING TO MAKE ON THE ANALYST CALLS TODAY AND I'M CONFIDENT THAT WE'RE GOING TO GET THERE.

PISANI: CAN YOU JUST POINT OUT. THE WORLD IS A GLOBAL PLACE.

NIEDERAUER: IT IS.

PISANI: CAN YOU EXPLAIN TO THE VIEWERS THE FOREIGN OWNERSHIP? CAN YOU EXPLAIN THE OWNERSHIP THE NYSE EURONEXT IS SUBSTANTIALLY OUTSIDE OF THE UNITED STATES AND ALSO WHO OWNS THE DEUTSCHE BOARD?

NIEDERAUER: I WANT TO CORRECT A COUPLE OF THE THINGS WE'VE BEEN SAYING SO FIRST OF ALL, LET'S STICK TO THE FACTS. OUR SHAREHOLDER BASE RIGHT NOW IS 90% U.S. AND 10% OUTSIDE OF THE U.S. I THINK WHAT YOU'VE HEARD US SAY ON THE ANALYST CALLS IS THE MIX OF BUSINESS IS ALREADY 50% OUTSIDE OF THE U.S. OUR COMPANY IS ALREADY DUALLY HEADQUARTERED. WE HAVE A GLOBAL BOARD. REPRESENTATIVES FROM SEVEN DIFFERENT COUNTRIES ARE ON IT NOW. THEIR SHAREHOLDER BASE IS 40% U.S., A GOOD CHUNK GERMAN, UK AND ASIA, WHICH I LOVE GETTING ASIA INVESTORS BY THE WAY. THE NEW CO IS AT 55% U.S. OWNERSHIP THAT I TALKED ABOUT SO I DON'T KNOW WHAT PEOPLE ARE NERVOUS ABOUT. IT IS A GLOBAL COMPANY --

BURNETT: YOU HAVE THE EURONEXT AND I UNDERSTAND THAT BECAUSE YOU SAID YOU WANT EUROPE AND THEN I SAID, WHY DEUTSCHE BORSE? YOU ALREADY HAVE EUROPE. WHY ADD ANOTHER?

NIEDERAUER: BECAUSE THINK ABOUT THE COMPLEMENTARY FOOTPRINT, ERIN. THEY HAVE A HUGE POST-TRADE BUSINESS THEY'VE GOT THE PIECE OF THE DERIVATIVES BUSINESS IN EUROPE. WE'VE GOT THE SHORT END OF THE CURVE AND THEY HAVE THE LONG END. WE HAVE THE LOCAL INDICES AND THEY HAVE THE PAN EUROPEAN INDICES. THEY HAVE A SMALLER OPTIONS BUSINESS IN THE U.S. THAN WE DO AND OBVIOUSLY WE HAVE THE FRANKFURT STOCK EXCHANGE WHICH TO US JUST MAKE IT IS EVEN BIGGER FOR US.

BURNETT: SO DID YOU GUYS HERE HIM SAY NEWCO?

HAINES: YES.

BURNETT: SO WHAT'S THE NAME GOING TO BE BECAUSE CHUCK SCHUMER'S GOING TO COME UP.

NIEDERAUER: IT'S NOT GOING TO BE DBNYSE GROUP. WE'VE TELEGRAPHED THAT. IT IS NOT GOING TO BE ANNOUNCED TODAY AND IT'S STILL UNDER DISCUSSION.

HAINES: I WANT TO GO BACK TO SQUARE ONE. WHO ASKED WHO OUT FOR THE FIRST DATE?

NIEDERAUER: I'VE KNOWN THE LEADERS OF THE EXCHANGE FROM MY OLD DAYS FOR MANY, MANY YEARS. THIS IS SOMETHING THAT WE BOTH HAVE THOUGHT WAS AN INTERESTING IDEA. YOU MAY REMEMBER A COUPLE OF YEARS AGO WE HAD PRELIMINARY CONVERSATIONS THAT ENDED PREMATURELY AND MY VIEW IS THAT WE ALWAYS KEPT IN TOUCH WITH EACH OTHER AND FOUR OR FIVE MONTHS AGO WE SORT OF LOOKED AT EACH OTHER AND SAID NOW MAY BE THE RIGHT TIME. SO THAT'S HOW IT ALL STARTED.

PISANI: PEOPLE STANDING AROUND WATCHING THIS, CAN YOU ADDRESS THE PEOPLE HERE ON THE FLOOR AND SAY WHAT THE FUTURE OF THE FLOOR IS? WHAT DO YOU WANT TO DO? WE SEE YOU INVESTING MONEY HERE EVERY DAY BUT PEOPLE ARE SAYING THE FLOOR IS AN OLD INSTITUTION THAT WILL GO WAY. CAN YOU ADDRESS THAT DEFINITIVELY.

NIEDERAUER: I THINK YOU FOR CLOSING WITH THE EASIEST QUESTION YOU'VE ASKED ME ON THIS INTERVIEW SO FAR.

BURNETT: WE HAVE ONE MORE.

NIEDERAUER: OKAY. AS I'VE SAID TO THE PEOPLE ON THE FLOOR THAT I HAVE COME TO LOVE AND TRUST, HOPEFULLY THE FEELING IS MUTUAL, THIS PLACE IS GOING NOWHERE. WE LIKE THIS PLACE, WE LOVE THIS PLACE. THIS IS THE ICON. WE ARE INVESTING IN THE PLACE AND IF ANYTHING, OUR U.S. FOOTPRINT WITH THIS DEAL GETS SLIGHTLY BIGGER. WE WOULD BE CRAZY TO SHUT IT DOWN. UNDER NO CIRCUMSTANCES ARE WE CLOSING THE FLOOR HERE. WHAT'S YOUR QUESTION? HOPEFULLY THAT WAS FOR THE IPO.

BURNETT: THAT WAS FOR YOU, ACTUALLY. I WANT TO ASK YOU, WHAT THE HOLDUP IS OVER THE NAME? THERE IS A LOT IN A NAME, AS WE ALL KNOW, AND THERE WILL BE AS THE PUBLIC LOOKS AT THIS AND WASHINGTON LOOKS AT IT. SO WHY ARE YOU NOT READY TO ANNOUNCE A NAME THAT HAS NEW YORK IN THE FRONT?

NIEDERAUER: BECAUSE IT IS EXACTLY WHAT YOU SAID, RIGHT? IT'S A VERY FUNNY THING.YOU CAN HAVE THE BEST DEAL IN THE WORLD, THE BEST ECONOMICS IN THE WORLD, ESPECIALLY IN THE INDUSTRY WE'RE IN, EVERYBODY IS REALLY PROUD OF THEIR NAME, RIGHT? I MEAN, I'VE POURED MY SOUL INTO THIS PLACE. I COULDN'T BE PROUDER OF THE NYSE. CONVERSELY MY NEW PARTNERS ARE EQUALLY PROUD. SO I THINK IF YOU THINK ABOUT THE EMOTION AROUND THAT, YOU HAVE THREE CHOICES. YOU PUT THE BIGGER COMPANY'S NAME FIRST, THE BETTER BRAND FIRST, OR YOU REINVENT THE CATEGORY AND COME UP WITH A HOLDING CO NAME THAT INVOKES WHAT WE'RE DOING GLOBALLY. TO ME, THOSE ARE THE THREE CHOICES. I JUST TOLD YOU ONE OF THEM IS OFF THE TABLE. OKAY. THANK YOU, GUYS. REALLY APPRECIATE IT.

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