Done Deal: ICE Seals Takeover of New York Stock Exchange
IntercontinentalExchange (NYSE:ICE) put the finishing touches on its transformative acquisition of NYSE Euronext (NYSE:NYX) on Wednesday, officially ending more than two centuries of independence for the iconic New York Stock Exchange.
The transaction creates a juggernaut in the exchange world that has its tentacles in everything from equities and interest rates to energy, foreign exchange and derivatives.
“This is a game-changing transaction," ICE Chairman and CEO Jeffrey Sprecher said in a statement. "ICE now leads in terms of the breadth and depth of services, best-in-class technology, and access to markets and capital."
The transaction thrusts low-profile Sprecher into the exchange world’s spotlight. He founded ICE in 2000, turned it into a global network of exchanges and clearing houses and now controls NYSE, which was founded in 1792.
“I want to put what we did in my company into this 1792 brand: to be innovative, to take risks, to be open and transparent,” Sprecher told FOX Business on Wednesday.
He noted ICE and NYSE have "some overlaps” and pledged to take a “fresh look at the business” and announce potential changes in the coming weeks.
One thing Sprecher said he won’t change is the name of the historic NYSE building.
“The last I looked, it was carved in granite. The name of this building is not going to change, nor is its location, nor is its iconic nature,” he said.
The decision to pair up with Atlanta-based ICE highlights the need for exchanges to diversify as the equity trading business has been hit with depressed trading volumes and stubbornly-low margins.
“We now have a stronger and more diversified business model, which leverages the iconic NYSE Euronext brand, our leadership in listings, equity options and interest rate markets with ICE's attractive portfolio of markets, clearing houses and technology for the global derivatives markets,” NYSE Euronext CEO Duncan Niederauer said.
After steering NYSE through the sale process, Niederauer will stay on as CEO of the NYSE Group and also serve as president of ICE under Sprecher, who will remain chairman and CEO.
The deal closure follows a slight delay as the companies waited for final approval from regulators in Europe.
It also comes after NYSE’s sale to Germany’s Deutsche Borse collapsed in 2011 due to antitrust concerns. During those negotiations, ICE teamed up with Nasdaq OMX Group (NASDAQ:NDAQ) to make a joint bid for NYSE, but that deal also fell apart amid regulatory concerns.
The combined companies will continue to trade on NYSE, but now under the ticker symbol “ICE.”
NYSE and ICE said they will be dual-headquartered in New York and Atlanta. They announced four members of the NYSE board have joined the expanded ICE board: Sylvain Hefes, Jan-Michiel Hessels, James McNulty and Robert Scott.
ICE reiterated it plans to pursue an initial public offering of Euronext in 2014.
Shares of ICE ticked up 0.46% to $198.70 Wednesday morning, extending its 2013 surge to 60.4%.