Exchange groups NYSE Euronext and Deutsche Börse have extended the deadline for completing their merger to ensure they can clear the necessary regulatory hurdles.
The decision gives the exchanges until 31 March 2012 to complete their deal and comes a week after the market operators announced a cap on trading and clearing fees in a third package of concessions, as part of efforts ensure their merger is passed by European regulators.
Since the proposed combination was originally unveiled, the bourses have spent the best part of a year convincing shareholders and customers of the industrial logic of the deal while trying to ease fears it will create a monopoly in the European exchange-traded derivatives markets. The most significant approval from the European Commission’s competition unit is still pending with a final decision expected by 9 February at the latest.
If they merged, NYSE Euronext, which purchased London-based derivatives bourse Liffe in 2001, and Deutsche Börse, which owns the Eurex derivatives business, would control upwards of 90% in a variety of European futures and options.
In addition to the fee freeze, the exchanges have proposed open access to the vertically-integrated Eurex Clearing central counterparty and the divesture of their single equity derivatives businesses.
The US Department of Justice (DOJ) announced last week that it would sanction the merger as long as Deutsche Börse sells its stake in Direct Edge, a US exchange operator.
Deutsche Börse holds a 31.5% stake in Direct Edge through the IntercontinentalExchange, which is wholly owned by Eurex. The DOJ said that it would allow two years for a combined DB-NYSE to make the sale.
Deutsche Börse and NYSE Euronext first agreed to merge in February 2011 in a deal that would create an exchange operator with a market capitalisation of US$9 billion and realise cost savings of around US$800 million.