USA: Eurex agrees to buy International Securities Exchange for 2.8 billion dollars (USD)

Eurex cements its position as the world's biggest derivatives exchange when its parent Deutsche Borse signs an agreement to acquire the New York-based International Securities Exchange for 2.8 billion U.S. dollars (USD). Eurex and International Securities Exchange (ISE) announced Tuesday (May 01) that they have signed and agreement under which Eurex will acquire ISE for 2.8 billion U.S. dollars (USD) cash. According to Eurex, the venture will create the largest transatlantic derivatives marketplace. Deutsche Boerse's Eurex derivatives platform, which it co-owns with Swiss exchange SWX, will pay ISE shareholders 67.50 (USD) for each of their shares. Deutsche Boerse said it would contribute 85 percent of the total purchase price and SWX 15 percent. "We will form the undisputed market leader in individual equity, equity index, and long-term interest rate derivatives world-wide, with a combined overall trading volume of 2.1 billion contracts in 2006," said Eurex CEO, Andreas Preuss and added, "These three product categories account for 67 percent of the exchange traded volume globally." The partners expect the transaction to close in the fourth quarter of 2007, following a simple majority approval by ISE shareholders and approval form the U.S. Securities and Exchange Commission. President and CEO of ISE, David Krell said that his staff are excited over the acquisition and that ISE management positions will not be effected by the merger. "Both ISE and Eurex have demonstrated now that we are the industry leaders because we foster creativity and innovations. We've been the catalyst for change in both senses across the Atlantic and in our respective spheres. The mindset to be a leader in this industry is what makes us both very successful, and we'll be even more successful when we combine these organisations," said Krell. Under the agreement ISE will continue to operate as a separate Securities and Exchange Commission regulated entity in its current governance structure and continue to use the ISE brand.

ITN Source | May 2, 2007

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