A Georgia based company is breaking into hallowed ground. IntercontinentalExchange Inc., or ICE, has agreed to pay approximately $8.2 billion to NYSE Euronext, or NYX. As mergers and acquisitions go, if this one is approved, it will make history. Two other companies have tried to purchase NYX, but both efforts were blocked by regulators.
The fact that ICE and NYX don’t share a lot of business may be the key to this merger actually taking place. Both companies are exchange operators, but ICE deals mostly in futures. The merger of the two companies will diversify the business to include equities and equity derivatives, credit derivatives, agricultural and energy commodities, foreign exchange and interest rates. Included in the merger is Liffe, NYSE Euronext’s United Kingdom futures market, which ICE was willing to pay big money to acquire.
ICE has tried twice before to acquire NYX, but both times the deals fell apart. The last attempt in April 2011 with another group was blocked by regulators on antitrust grounds. The board of directors of each company has approved the merger and is waiting for regulators to do the same.
Anytime two companies merge, whether in Georgia or elsewhere, there are several details that have to be worked out. Not only are there internal issues such as leadership, personnel changes, and other business related issues, but there are also legal issues to be dealt with. Mergers and acquisitions require certain paperwork to be filed with a myriad of government agencies. It depends on the nature of the companies what agencies have to be notified. Both companies will undoubtedly benefit from detailed advice and assistance with their merger in order to ensure the best chance of success.
Source: equities.com, “NYSE Euronext and IntercontinentalExchange to Merge in $8.2 Billion Deal,” Dec. 20, 2012