Bourse mega-mergers seem remote for now

Orlando:) NYSE Euronext plans to focus on smaller deals and returning capital to its shareholders after its failed $7.4 billion (Dh27.21 billion) merger with Deutsche Boerse, the company's chief executive said on Friday.

"I would not expect us, nor anyone else in the industry, to do a mega-merger anytime soon," said Duncan Niederauer, chief executive of NYSE Euronext. "I think everyone is going to kind of take a pause and reassess the landscape.

European anti-trust authorities on Wednesday blocked the merger, which would have created the world's biggest stock exchange operator. The European Commission blocked the deal, which had already been approved by US regulators, saying that the combined entity's "near-monopoly" would make it hard for new players to compete.

"This [merger] was a game changer," Niederauer said at TD Ameritrade Institutional's national conference in Orlando. "It made a lot of sense. It didn't happen.

"Now, I don't think the next thing I should be going to shareholders with is another great cross-border mega-merger."

"I think everyone is going to say, ‘maybe we should just distribute more of the money to shareholders and run kind of a slightly lower-growth, more utility-like model'."

The parent of the Big Board reports its quarterly results next Friday, and Niederauer said he would address three issues on the conference call to discuss the results: The company's cash management strategy — it recently said it would proceed with $550 million of share buybacks; the running of the business and the expense base of the core company; and NYSE Euronext's post-trade business in Europe and other new initiatives.

Outlook: CME  move unlikely

Duncan Niederauer, chief executive of NYSE Euronext said he does not think CME Group, the biggest US futures exchange operator, would make an attempt to try to acquire NYSE Euronext or Deutsche Boerse, as it is unlikely those deals would get consummated.

CME on Thursday surprised investors with a sharp increase in its dividend, as well as an annual payout. Niederauer called the move ‘really interesting' and said that other exchanges would likely follow suit.

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