Eurex has completed the acquisition of International Securities Exchange Holdings, Inc. (ISE), following the SEC’s approval of the merger.
Effective from the opening of the US markets on 20 December 2007, ISE common stock will be suspended from trading on the NYSE and will be delisted shortly thereafter.
The exchange will continue to be regulated by the SEC as a registered national securities exchange and will operate under the existing management team as an independent subsidiary of Eurex.
Eurex CEO Andreas Preuss will join ISE’s board of directors. With the addition of ISE, Eurex has expanded its liquidity network into the US and into US Dollar products. On a combined basis, Eurex and ISE will be the market leader in individual equity and equity index derivatives worldwide.
Eurex and ISE members will benefit from access to highly liquid products that span multiple asset classes and currencies. The combination provides growth opportunities through the cross-selling of existing products and through the future development of innovative joint products. The first joint initiatives will be announced in early 2008.
ISE has experienced strong volume growth this year and is on track to outperform expectations. In November 2007, ISE’s average daily volume reached a new record of 4.3 million options contracts. Volumes year-to-date through November 2007 increased 35% to 741.6 million options contracts from 548.8 million contracts in the same period last year.
Eurex acquired ISE for approximately $2.8 billion in cash, or $67.50 per share. Eurex’s two parent companies, Deutsche Boerse AG and SWX Swiss Exchange, provided the necessary financing in line with the economic interests of 85% and 15%, respectively, that both companies have in Eurex.
The combined group’s range of both US Dollar and Euro denominated products is unique in the market. The combination is home to the Euro zone interest rate and equity index benchmark derivatives products and offers options on all major US and European companies. Currently, ISE and Eurex distribute their products to approximately 560 direct exchange members.
“We have successfully completed a transaction which will expand Deutsche Boerse’s leading position in the fast and steadily growing global derivatives markets. The acquisition will further fuel our strong growth prospects and create value for our shareholders,” says Reto Francioni, CEO, Deutsche Boerse.
“Our strategic vision is to organize markets globally. ISE has a very strong presence in the US market and the combination is a significant step in expanding our global multi-asset class liquidity network. ISE will maintain a high level of self-responsibility as an independent market under the ISE brand and management, ensuring that the entrepreneurial spirit which has been the hallmark of ISE’s success to date will continue. Together we will leverage our combined distribution networks, know-how and innovation to address the specific needs of our respective marketplaces,” explains Andreas Preuss, CEO, Eurex.
“As part of Eurex, ISE will be poised to expand its reach internationally and to deliver the combined benefits of product innovation, technology leadership, and trading efficiencies to our members. At the same time, we are focused on continuing to provide the same high level of customer service and hands-on attention to our members to meet their specific trading needs,” adds David Krell, CEO, ISE.