NEW YORK — IntercontinentalExchange Inc., the 12-year-old energy and commodity futures bourse, agreed to acquire NYSE Euronext for cash and stock worth $8.2 billion, moving to take control of the worlds biggest equities market.
IntercontinentalExchange, based in Atlanta, will pay $33.12 a share for the owner of the New York Stock Exchange, 38 percent above Wednesdays closing price, according to a statement Thursday. Both boards approved the proposal and the companies expect to complete the transaction in the second half of 2013. Last year, the United States blocked a joint hostile bid by IntercontinentalExchange and Nasdaq OMX Group for the New York-based company on concern the combination would dominate U.S. stock listings.
Merging NYSE Euronext, which owns the biggest exchanges by value of listings in the U.S., France and the Netherlands, with the second-largest futures market underscores both the growing importance of derivatives and the diminishing influence of the 220-year-old NYSE. The Big Board, once the benchmark for global free markets, has seen its share of trading in stocks listed on the exchange decline to 21 percent from 82 percent.
Not only are they losing volume, theyre also getting squeezed in their margins because of all these competitors who have different corporate structures, said Thomas Caldwell, who oversees about $1 billion as chairman and chief executive officer of Toronto-based Caldwell Securities. His firm owns shares of NYSE and ICE. Theyre languishing as everyone sits and waits for cash equity volumes to pick up, which may or may not occur for several years.
Jeffrey Sprecher, the chief executive officer of IntercontinentalExchange, will head the combined company, with NYSE CEO Duncan Niederauer becoming president. The companies plan to explore an initial public offering for NYSEs European equity unit.
IntercontinentalExchanges market value has grown to $9.3 billion as its shares rose 7.4 percent in 2012, data compiled by Bloomberg show.
A takeover would mark an unusual success after more than $32 billion of exchange takeovers failed since October 2010.
This is a much easier deal to get done, said Brian Barish, who helps oversee about $7 billion including about 4 million NYSE Euronext shares as president and chief investment officer of Denver-based Cambiar Investors. When Nasdaq was talking about doing something with NYSE, there were obvious antitrust market concentration problems. ICE is a totally different story because they dont do equities.
The New York Stock Exchange, formed in 1792 under a sycamore tree on Wall Street, became the center of American capitalism through its grip on trading and listings for companies from Ford to AT&T and DuPont.
The Big Boards reputation faded in the last decade when scandals highlighted the potential for collusion on the NYSE floor and faster technology reduced the need for middlemen. In September 2003, Chairman Richard Grasso ended a 36-year career at the exchange as regulators and directors said a $140 million pay package called his leadership into question.
Grassos successor, John Thain, orchestrated the 2006 reverse merger that gave the NYSE control of Chicago-based Archipelago Holdings and turned the member-owned exchange into a public company. By then, regulatory directives aimed at lowering transaction costs were in the process of cutting the NYSEs market share.