IntercontinentalExchange (ICE) has agreed to acquire NYSE Euronext for $33.12 per share, or approximately $8.2 billion.
The acquisition will be funded by about 67% ICE shares and 33% cash. The transaction value of $33.12 represents a 37.7% premium over NYSE Euronexts closing share price on December 19. The cash portion comprises cash on hand as well as existing ICE credit facilities.
The deal is expected to close in the second half of 2013 and requires regulatory approval in the U.S. and Europe, as well as the approval of shareholders of both firms.
Run-rate expense synergies of $450 million are expected by the second full year following the close, according to ICE. The combination of the two exchange groups would result in earnings accretion of greater than 15% by the first year post-closing, ICE says.
ICE says it will retain the NYSE Euronext brand with dual headquarters in Atlanta and New York. NYSE Euronext will retain its headquarters on Wall Street, while ICE plans to open a Midtown Manhattan office in June of next year. ICE will also preserve NYSE Liffe, the London-based derivatives exchange, along with its benchmark interest rate complex.
If market conditions and European policymakers support the offering, ICE said in a statement, the exchange group plans to carry out an initial public offering of Euronext as a Continental European-based entity following the close of the acquisition.
“Our transaction is responsive to the evolution of market infrastructure today and offers a range of growth opportunities, while enhancing competition in US and European markets and broadening our ability to address new markets and offer innovative products and services on a global platform,” said ICE Chairman and CEO Jeffrey C. Sprecher, who will remain in the role at the combined exchange groups. “We believe the combined company will be better positioned to compete and serve customers across a broad range of asset classes by uniting our global brands, expertise and infrastructure. With a track record of growth and returns, clearing and M&A integration, we are well positioned to transform our combined companies into a premier global exchange operator that remains a leader in market evolution.”
Four members of the NYSE Euronext Board of Directors will be added to the ICE Board of Directors, which will be expanded to 15 members.
The board of NYSE Euronext carefully considered a range of strategic alternatives and concluded that ICE is the ideal partner for NYSE Euronext in an evolving market landscape,” says Jan-Michiel Hessels, chairman of the Board of NYSE Euronext. “We look forward to working with ICE to complete this compelling, value-enhancing combination.”
Duncan L. Niederauer, CEO of NYSE Euronext, who will become president of the combined companies and CEO of NYSE Group, adds: This transaction leverages the strength of our iconic brand and the value we have created in our global equity and derivatives franchises positioning the business for solid long-term growth and development. We are bringing together two highly complementary businesses, creating an end-to-end multi-asset portfolio that will be strongly positioned to serve a global client base and capture current and future growth opportunities.
(CG)