Last year the German stock exchange broke its losing streak with a couple of smart mergers, but it’s being challenged by cheaper, faster electronic competitors.
Until last year, Frankfurt stock exchange operator Deutsche Boerse suffered from one of the sorriest losing streaks in European deal-making. Since 2000, Europe’s largest exchange by revenue and market value had failed twice to buy the London Stock Exchange and three times in its attempts to secure Euronext, the recently formed operator of the Amsterdam, Paris, Brussels, and Lisbon exchanges.
Finally, in April, 2007, after the New York Stock Exchange completed a $14.6 billion merger with Euronext, Deutsche Boerse announced it was snapping up International Securities Exchange Holding, the second largest equity options exchange in the US, for $2.8 billion, creating the world’s first transatlantic derivatives trading operator.
Thanks partly to that deal, which closed in December, 2007, Deutsche Boerse is looking pretty smart these days. It dominates trading in German equities through its operation of the Frankfurt stock exchange, and it owns Eurex, Europe’s largest derivatives exchange. It also runs Clearstream, one of two major global providers of clearing and settlement services for securities, which handle the back-office processing of trades.