On Thursday, Dec. 20 IntercontinentalExchange (ICE) announced that it had reached a definitive agreement to acquire NYSE Euronext in a stock-and-cash transaction. The announcement seemed anti-climactic given the high profile M&A dance a year prior between NYSE Euronext and Deutsche Börse (DB) and the attempt to scuttle it by a joint counteroffer by ICE and Nasdaq OMX.
The acquisition price, $31.12 per share(roughly $8.2 billion), was a considerable discount to what DB was offering a year earlier and the terms seemed less desirable to NYSE than the DB deal, which was presented as a merger of equals and included a larger role for NYSE boss Duncan Niederauer and more representation on the board of the combined entity from NYSE board members.
We asked ICE Chairman and CEO Jeff Sprecher to give us the skinny on the deal, what synergies are involved and how he will manage his expanding firm. Here is what he had to say.
Dan Collins: What are the largest benefits for ICE and it shareholders from the acquisition of NYSE Euronext?
Jeff Sprecher: ICE has a strong track record of successfully integrating businesses. Since acquiring the International Petroleum Exchange in 2001, ICE Futures Europe volumes have set new records every year. Volumes at the former New York Board of Trade have doubled since we acquired it in 2007. Based on the complementary asset classes, the combined company will be a leading operator of regulated, global markets with strong cash flows and deep resources to pursue growth opportunities. We have identified significant synergies and expect the transaction to be highly accretive for shareholders in the first year after closing, and importantly remain a growth leader in our sector.
DC: Your joint offer along with Nasdaq for NYSE was struck down by regulators as was the NYSE/DB merger. Do you anticipate any antitrust issues? If the Liffe commodities business is seen as a potential antitrust stumbling block, could that be split off?
JS: We can’t speculate on regulatory matters, but we are working diligently to secure all required regulatory approvals and provide all required information in a timely manner. Our businesses serve different markets, different geographies and different clients, and this is something we looked at prior to completing our agreement.
DC: How will this deal change the landscape of the futures industry? The securities industry?
JS: In many ways, this combination is consistent with the way markets have evolved, particularly in a world of increased regulation, transparency and global competition. We believe the combined company will benefit the broader market through increased resources, continued innovation and a focus on solving market structure challenges to support growth for our customers. And as the regulatory landscape continues to change, the combined company will be in a strong position to offer compliance solutions for customers coping with an evolving mix of global regulations.