NYSE Euronext has agreed to buy the American Stock Exchange (Amex). The firm expects the transaction to close in the third quarter of 2008 and be accretive to its 2009 earnings.
Under terms of the agreement, NYSE Euronext will pay $260 million in common stock for the Amex. Amex members will also be entitled to receive additional NYSE Euronext common stock based on the net proceeds from the expected sale of Amex’s lower Manhattan headquarters.
NYSE Euronext believes the proposed acquisition will bring several benefits. It says the purchase will make NYSE Euronext the third-largest US options marketplace and will also allow the firm to: obtain a second US option exchange licence, so customers can choose between NYSE Arca and the Amex’s traditional market-maker model; Operate a third, complementary US cash equities exchange in addition to the NYSE and NYSE Arca; strengthen NYSE Arca’s position in ETF listing and trading, joining 381 current Amex ETF listings with 240 NYSE Arca ETF listings; offer a leading venue for listing and trading closed-end funds and structured products, including 545 listings on Amex and over 1,000 listings on NYSE; realise annualised run rate cost synergies of over $100 million within two years from closing, including technology, data center and staff integration, consolidation of professional and contract services and vendors; and relocate Amex’s trading floor operations to the NYSE trading floor.
“The addition of the American Stock Exchange to the NYSE Euronext family is highly beneficial for our customers and shareholders, and demonstrates our ongoing commitment to growing our business and product lines,” says Duncan Niederauer, CEO of NYSE Euronext.