New York Stock Exchange poised to become German-owned By Mark Trumbull,
Staff writer | February 10, 2011
A potential merger would make a German company
majority owners of the New York Stock Exchange, the symbolic
headquarters of American capitalism.
Two decades ago many Americans were dismayed when Rockefeller
Center turned Japanese in a mega real-estate deal. Now the
storied New York Stock Exchange might be on its way toward
majority ownership by Germany's Deutsche Boerse AG.
The NYSE isn't just a Manhattan icon, it's the symbolic
headquarters of American capitalism.
At least for now.
Deutsche Boerse and NYSE Euronext, both of which already
operate financial exchanges in Europe, are in advanced talks
for a merger in which the German company would have a majority
stake.
So is American capitalism about to come to an end?
No, but the prospective deal serves as another reminder
to Americans that their prosperity at home increasingly
depends on a global web of business ties. And it could be
a symbolic blow to the idea that New York is no longer preeminent
as a capital of world finance.
"This will further confirm in the minds of world political
and financial leaders [the notion] ... of an economic super
power in decline," said Peter Morici, a University
of Maryland economist, in a written comment Thursday.
The financial implications, should the companies reach
a deal and obtain regulatory approval, are less clear.
In a joint statement Wednesday confirming their talks,
the two companies sketched a vision in which both sides
would gain from cost-saving synergies and enhanced stature,
as they compete against other exchanges for business. This
would benefit both clients and the exchange's own profits,
the NYSE said.
Some Wall Street traders agree. And none other than New
York Mayor Michael Bloomberg, in a press conference, welcomed
the possible merger.
"I think it's very good for New York to have two of
the strongest exchanges together. It's going to give us
access to Europe, and the Europeans access to the States
in a way that our competitors, like London, will not have,"
he said.
Mr. Morici, however, worries that foreign ownership might
lead to a migration of some financial business away from
New York.
The two companies said a merger would create the "world’s
largest exchange operator by revenues and profit,"
a global leader in stock trading and so-called derivative
transactions.
Exchanges earn their money from fees when corporations
list their shares for purchase, when trades are executed,
and when they sell auxiliary services such as market data.
News of the possible merger comes amid a wave of global
consolidation in financial exchanges. Also this week, the
London Stock Exchange and TMX Group (parent of the Toronto
Stock Exchange) announced a merger.
The combined stock-exchange giant would have dual headquarters
in Frankfurt, Germany, and New York.