New European Market Nuzzles Up to Nasdaq
The London and Frankfurt stock exchanges, which are merging into a new exchange named IX, expressed interest Monday in creating a global exchange with the Nasdaq Stock Market.
The European exchanges, already working on a joint venture with Nasdaq, sent a memo to shareholders who will vote on the IX merger saying they may aim for something more with the U.S. market, home to most of the world’s fastest-growing tech firms.
“The parties also intend to take substantial cross-shareholdings in each other and will work together thereafter to explore a full merger of interests to create a global exchange,” the document said.
But later, London Stock Exchange Chairman Don Cruickshank backed off slightly on that possibility at a news conference, stressing that there were a lot of issues to be worked out for such a merger to come off.
A spokeswoman for Nasdaq said that market is focusing on its European joint venture, but hasn’t ruled out further commitments. “Beyond that, we are talking about other more substantive relationships . . . but it’s too premature to discuss anything in further detail,” said spokeswoman Judy Inosanto.
At a separate news conference in Frankfurt, Deutsche Boerse chief Werner Seifert said the stock markets in Milan and Madrid were hoping to join IX next year, giving the new exchange a 70% share of Europe’s trading activity.
Still, he added, a “powerful” partner in the United States--and Asia as well--would be necessary to allow for trading across time zones around the world.
Seifert also said he wouldn’t rule out an eventual merger between IX and EuroNext, referring to the new exchange being formed by the stock markets in Paris, Amsterdam and Belgium, a merger also announced this past spring.
“We need a European bourse, and Paris is a highly attractive market,” he said.
Europe’s exchanges have been moving to consolidate in the wake of last year’s introduction of the unified euro currency and increased competition from U.S. markets and electronic exchanges.
