Dec. 20 - The iconic New York Stock Exchange is being acquired by 12-year old start-up IntercontintentalExchange in an $8.2 billion dollar deal that could increase the dominance of electronic trading. Bobbi Rebell reports.
Outside the NYSE Euronext holiday bells ring just like every year- but Thursday's $8 billion dollar takeover deal from the IntercontinentalExchange marks the end of an era. And an admission the NYSE had to make a move: Morningstar's Gaston Ceron: SOUNDBITE: GASTON CERON, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "We are in a kind of beaten down environment with volume in equities overall and I think the exchange just has to find better ways to compete." Before this deal, shares of NYSE Euronext had fallen by nearly a third- since a previous offer from ICE and Nasdaq failed. Shares jumped on word of the current deal. The NYSE has had a rough ride - it's been hit by new technology and the rise of private trading venues run by Wall Street banks and brokers. ICE says it expects to get $450 million in cost savings- and boost earnings by 15 percent. Not clear?- if that will trickle down and save investors money on trading. ICE will also look to sell Euronext- in an initial public offering after the deal closes. But it will hold onto Liffe, Europe's second largest derivatives market- to better compete against the U.S. based CME group- its largest U.S. based rival. While the takeover of the two-centuries old NYSE by a 12-year old start-up in Atlanta is dramatic- the reality is most of those changes were already happening: SOUNDBITE: GASTON CERON, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "I don't think necessarily this is a final nail in the box or anything like that just because it's been a continuing evolution. It's certainly possible that we will see more electronic trading but you know I think that is a topic that gets a lot of attention but at the same time you know that's been a long running trend and I'm sure things will continue to pull in that direction." And don't expect the NYSE name to go anywhere- ICE says it expects to hold onto that iconic brand.