NYSE Euronext (NYX), the world's leading and most diverse exchange group, today completed its acquisition of the American Stock Exchange(Amex), becoming the third-largest U.S. options marketplace and enhancing the company's leadership in ETFs, cash equities, closed-end funds and structured products.
The transaction is expected to produce annualized run-rate cost savings in excess of $100 million by the end of 2009 and be accretive to earnings.
"We welcome the Amex to the NYSE Euronext family," said Duncan L. Niederauer, NYSE Euronext CEO. "This combination is beneficial to our customers and shareholders, further improves our competitive position in U.S. options, ETFs and cash equities, and enables us to realize significant operational efficiencies and new business opportunities. Amex customers will have more products and services available to them and the advantage of leading-edge technology. On behalf of everyone at NYSE Euronext, I want to thank Neal Wolkoff as well as the staff and members of the Amex for their outstanding support."
Neal Wolkoff, former Chairman and CEO of the American Stock Exchange, said: "I am extremely pleased that we have completed this compelling and strategic business combination that joins Amex to NYSE Euronext. Amex's diverse business groups will enhance the competitiveness of NYSE Euronext's different product lines and provide new business opportunities to the marketplace."
Attractive U.S. Options Dual Market Structure
With the acquisition of the Amex, NYSE Euronext is now the third-largest U.S. equity options marketplace based on number of contracts traded. Having a second U.S. options exchange enables NYSE Euronext to operate a compelling dual market structure that provides all customers the choice of price-time priority on NYSE Arca and the Amex's traditional market-maker model as well as an expanded array of services.
NYSE Arca Extends Leadership in ETFs
NYSE Arca represents nearly $317.5 billion in ETF and ETN assets under management in the U.S., more than any other exchange. With Amex's 416 ETF and 13 ETN listings, NYSE Euronext's U.S. leadership position will grow to more than 680 ETFs and 90 ETNs. In addition, the company's European markets currently have more than 344 ETF listings.
NYSE Euronext expands its portfolio of closed-end funds and structured products with approximately 420 Amex listings joining the more than 1,000 issues already listed on the on the company's U.S. markets.
Global Listing Leadership Complemented by the Addition of Amex Companies
More than 500 Amex-listed companies are joining NYSE Euronext, adding to it a U.S. platform for small-cap companies and building on the company's leadership position in global listings. With the Amex companies, NYSE Euronext now has nearly 4,600 listed issuers and 6,500 listed issues (as of Oct. 1, 2008), which is more than any other exchange group.
Operational Integration and Business Highlights
In December 2008, it is anticipated that the equities trading platform will transition to NYSE Euronext technology and Amex systems will be retired. In addition, NYSE Euronext plans to relocate Amex's options trading floor operations to the NYSE options trading floor during the first quarter of 2009, and to transition from the Amex-supported technology to NYSE Euronext-supported technology for electronic options trading. The migration to NYSE Euronext systems will significantly improve the functionality and the customer experience across all Amex offerings.
Under the terms of the agreement, NYSE Euronext has paid $260 million in NYSE Euronext common stock for the Amex. In addition, net proceeds, if any, from the expected sale of Amex's lower Manhattan headquarters will be distributed to Amex members in NYSE Euronext common stock.
Lehman Brothers acted as financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to NYSE Euronext on this transaction. Amex was represented by Morgan Stanley as financial advisor and Milbank, Tweed, Hadley & McCloy LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisors.
Other Highlights
Also as previously disclosed on July 31, 2008, effective on the close of the Amex transaction, the NYSE Euronext board approved the removal of the transfer restrictions on the remaining 41.8 million shares issued as part of the business combination transaction between New York Stock Exchange, Inc. and Archipelago Holdings, Inc., which was completed on March 7, 2006. These shares were previously restricted until March 2009.
Also as previously announced on March 18, 2008, NYSE Euronext's board authorized the repurchase of up to $1 billion of NYSE Euronext common stock, which NYSE Euronext expects to commence following the closing of the Amex transaction. Under the program, NYSE Euronext may repurchase stock from time to time at the discretion of management in open market or privately negotiated transactions or otherwise. This stock repurchase program does not obligate NYSE Euronext to repurchase any dollar amount or number of shares of NYSE Euronext common stock and any such repurchases will be made in compliance with applicable United States and European laws, regulations and approvals and subject to strategic considerations, market conditions and other factors. NYSE Euronext's stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.