Ten years from now the New York Stock Exchange's (NYSE) pending $10.2 billion merger with European exchange operator Euronext will mark a watershed in the history of global investing: the birth of the world's first global stock exchange.
Three years ago, the NYSE was the faded grande dame of stock exchanges and mired in corporate scandal. But CEO John Thain, the MIT-educated former Goldman Sachs banker, has since reinvigorated the NYSE. Nothing exemplifies this more than the NYSE's proposed purchase of Euronext, a deal that would create the world's largest and most liquid global securities market with combined listings of $27 trillion -- more than twice the size of the U.S. economy. With joint headquarters in New York and Paris, the new NYSE-Euronext would handle about $2.1 trillion in stock trades a month, double the size of rival Nasdaq.
While Euronext doesn't have a high profile in the U.S., NYSE-Euronext is indeed a merger of equals. Euronext is the biggest international exchange in the world and runs stock exchanges in five countries including France, the Netherlands and Portugal. It also runs the largest derivatives market (LIFFE) in the United Kingdom, making it the second-largest derivatives exchange in the world after Chicago.
Although it's the NYSE-Euronext combination that is grabbing today's headlines, it's not the only global stock exchange game in town. It was scrappy Nasdaq that set off the global consolidation frenzy with its a $4.5 billion bid for the London Stock Exchange (LSE) in late March. The Nasdaq -- thus far, a rejected suitor -- has since acquired more than 25 percent of the LSE. But there is no doubt that Nasdaq's moves have pressured the newly public NYSE to find a European partner, even though many thought that the NYSE, the world's premier brand, would have been a better fit for the LSE. Not to worry though: Although the LSE has become the destination of choice for international companies, NYSE-Euronext would be a formidable competitor to London.
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