Pay no attention to that European shopper who just bought the world's biggest stock exchange for about $10 billion.
New York Stock Exchange officials did their best on Tuesday to persuade a skeptical public that their politically explosive decision to sell to Deutsche Börse does not represent a decline in stature for the institution that symbolizes New York City's financial clout.
“It is a merger, it is a business combination—I don't know how many times we can say that,” NYSE Chief Executive Duncan Niederauer declared at a press conference on Tuesday. “You [the media] keep saying it's an acquisition.”
Yet by any reasonable standard, the 219-year-old New York exchange has agreed to be acquired by a company that happens to be based in Germany. One sign of that reality: Deutsche Börse shareholders will control 60% of the new company's stock, a point that was disclosed last week when the two parties confirmed they were in talks. Further confirmation of who's in charge came Tuesday when the companies disclosed that 10 of the 17 board members would come from Deutsche Börse.
In a sign of the many public-relations challenges surrounding the deal, officials haven't decided on a name for the combined company. Sen. Charles Schumer reiterated his view on Tuesday that the New York name must come first, while Mr. Niederauer said it would take at least a month to settle the matter. Whatever is decided, the exchange CEO insisted the name won't be DB NYSE or the Big Bourse, a play on the NYSE's nickname “the Big Board.”
“It is an emotional decision for everyone, let's be honest about it,” Mr. Niederauer said. “There's a lot of national pride.”
Mr. Niederauer is to remain CEO of the combined company, and the top executive ranks are to be split equally, giving the company a potentially unwieldy management structure that includes a deputy CEO and two presidents. Headquarters will be in both Frankfurt and New York, plus significant operations will be maintained in nine European capitals, from London and Luxembourg to Paris and Prague. The company's stock will be listed and traded in New York, Frankfurt and Paris.
In a statement, Mayor Michael Bloomberg said the decision to keep New York as co-headquarters “reaffirms the central position that New York continues to play in the international financial system.”
Mr. Schumer was more guarded. “I will reserve judgment until all the details are settled,” he said.
At Tuesday's press conference, exchange officials mentioned they have entered into a “merger of equals,” a term that generally refers to deals in which management and boardroom positions are divided evenly. Such deals are often miserable failures, with difficult decisions deferred until they are too big to handle. Past self-professed mergers of equals include Citicorp/Travelers Group, AOL/Time Warner, Morgan Stanley/Dean Witter and, most notably, the epic flop between Germany's Daimler-Benz and Chrysler.
Indeed, NYSE's merger with Euronext was cast as a merger of equals when it was struck five years ago. But over time, the NYSE gained the upper hand as its officials took most of the top jobs, including CEO, chief financial officer and chief operating officer. NYSE officials argued that the exchange's center of gravity won't shift to Europe now, even though Deutsche Börse is in position to call the shots.
“We get along with each other,” said NYSE Chairman Jan-Michiel Hessels. “This is not against each other, this is with each other.”
“It is a merger, it is a business combination—I don't know how many times we can say that,” NYSE Chief Executive Duncan Niederauer declared at a press conference on Tuesday. “You [the media] keep saying it's an acquisition.”
Yet by any reasonable standard, the 219-year-old New York exchange has agreed to be acquired by a company that happens to be based in Germany. One sign of that reality: Deutsche Börse shareholders will control 60% of the new company's stock, a point that was disclosed last week when the two parties confirmed they were in talks. Further confirmation of who's in charge came Tuesday when the companies disclosed that 10 of the 17 board members would come from Deutsche Börse.
In a sign of the many public-relations challenges surrounding the deal, officials haven't decided on a name for the combined company. Sen. Charles Schumer reiterated his view on Tuesday that the New York name must come first, while Mr. Niederauer said it would take at least a month to settle the matter. Whatever is decided, the exchange CEO insisted the name won't be DB NYSE or the Big Bourse, a play on the NYSE's nickname “the Big Board.”
“It is an emotional decision for everyone, let's be honest about it,” Mr. Niederauer said. “There's a lot of national pride.”
Mr. Niederauer is to remain CEO of the combined company, and the top executive ranks are to be split equally, giving the company a potentially unwieldy management structure that includes a deputy CEO and two presidents. Headquarters will be in both Frankfurt and New York, plus significant operations will be maintained in nine European capitals, from London and Luxembourg to Paris and Prague. The company's stock will be listed and traded in New York, Frankfurt and Paris.
In a statement, Mayor Michael Bloomberg said the decision to keep New York as co-headquarters “reaffirms the central position that New York continues to play in the international financial system.”
Mr. Schumer was more guarded. “I will reserve judgment until all the details are settled,” he said.
At Tuesday's press conference, exchange officials mentioned they have entered into a “merger of equals,” a term that generally refers to deals in which management and boardroom positions are divided evenly. Such deals are often miserable failures, with difficult decisions deferred until they are too big to handle. Past self-professed mergers of equals include Citicorp/Travelers Group, AOL/Time Warner, Morgan Stanley/Dean Witter and, most notably, the epic flop between Germany's Daimler-Benz and Chrysler.
Indeed, NYSE's merger with Euronext was cast as a merger of equals when it was struck five years ago. But over time, the NYSE gained the upper hand as its officials took most of the top jobs, including CEO, chief financial officer and chief operating officer. NYSE officials argued that the exchange's center of gravity won't shift to Europe now, even though Deutsche Börse is in position to call the shots.
“We get along with each other,” said NYSE Chairman Jan-Michiel Hessels. “This is not against each other, this is with each other.”
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