According to reports, German company Deutsche Börse AG is in advanced talks to acquire and merge with the New York Stock Exchange. Deutsche Börse AG is the operator of the Frankfurt Stock Exchange, and the merger would create the world’s largest global financial market. But there is one thing that has already been requested: don't change the name. “The New York Stock Exchange is a foundation of the extraordinary American economic success story, and its name rightfully reflects the United States’ position as the financial center of the world,”said Rep. Ted Deutch, a Florida Democrat. So no go on "Die Börse Von New York"?
Whether we keep the name or not, if the deal is approved, it will be another signal of the city's fading dominance in financial exchanges, or as the WSJ puts it, "recognition that securities trading today goes on at all hours and in all time zones, making the actual bricks and mortar of Wall Street far less important than before." Under the deal, the NYSE Euronext shareholders would hold 40 percent of the new company, but Deutsche Börse shareholders would own as much as 60 percent, which would be incorporated in the Netherlands, with its HQ split between Frankfurt and Manhattan. "New York is going to be important, but it's not the financial center. Capital markets are everywhere now," said Michael LaBranche, CEO of LaBranche & Co.
The new entity, incorporating the NYSE, the Frankfurt Stock Exchange, and the four European exchanges owned by NYSE Euronext, would supplant CME Group as the world's largest futures exchange and create the biggest U.S. options group. Michael Pagano, a professor at the Villanova School of Business, warns that exchange specialists on Wall Street might have less of a role than previously: “They could become something like the Maytag repairman. He doesn’t necessarily do anything all day, but he’s there when you need him.” Even if a deal is reached this week, it will still have to go through approval by regulators. At the very least, we hope that the merger will bring about vast improvements in the quality of the NYSE candy machines; after all, Deutsche Börse are from the land of chocolate.
