Press releases 2000
03 May 2000
London Stock Exchange and Deutsche Brse to merge to create iX
Agreement with Nasdaq to create a high growth market
London Stock Exchange and Deutsche Brse today announce their plans for a merger of equals to create a new company, to be called iX. In addition, iX and Nasdaq have signed a memorandum of understanding to create a pan-European, high growth market.
iX will be the leading international integrated exchange organisation, offering trading and information products for equities, commodities and derivatives, together with a core exchange systems technology competence and an increasing emphasis on new e-commerce businesses. iX will provide the largest European stock market, with 53 per cent. of traded volume and, through Eurex, the biggest derivatives market worldwide.
iX will consist of all of London Stock Exchange's and Deutsche Brse's businesses, except for Deutsche Brse's 50 per cent. stake in Clearstream, which Deutsche Brse will continue to hold. London Stock Exchange Shareholders will receive shares amounting to 50 per cent. of iX's issued share capital and Deutsche Brse will receive shares amounting to 50 per cent. of iX's issued share capital. The Chairman of iX will be Don Cruickshank and Werner Seifert will become the Chief Executive.
iX will be based in and managed from London with major operations in Frankfurt. 45 per cent. of Europe's top 300 companies already have their primary listing on the London or Frankfurt exchanges. The compound annual growth in trading in the securities of London Stock Exchange and Deutsche Brse on a combined basis exceeds 35 per cent. over 4 years.
The electronic trading platform for all iX cash markets will be Xetra. This is expected to result in significant cost savings and other synergies and reduction of complexity for IT operations of iX and its customers.
Deutsche Brse and London Stock Exchange will support initiatives to set up a central counterparty and establish straight through processing at lowest cost for market participants. In the meantime, settlement will continue to be provided by Clearstream and CrestCo Limited.
The new joint venture with Nasdaq will bring together London's techMARK and Germany's Neuer Markt as the basis of the new pan-European high growth market. It will represent Europe's biggest high growth market with a market share of around 80 per cent. of traded volume. iX and Nasdaq will be equal shareholders in the joint venture that will be incorporated in and managed from London and operated in Frankfurt.
London Stock Exchange and Deutsche Brse envisage that other exchanges may become part of the iX Group in due course. As part of the further integration in Europe, discussions have commenced with Milan and Madrid.
Commenting on the proposed Merger, Don Cruickshank, Chairman designate of London Stock Exchange and iX, said: "These transactions mark a major step forward. They provide us with the opportunity to build a global market and we look forward to working to deliver the strategic vision we have outlined today."
Werner Seifert, Chief Executive of Deutsche Brse and CEO designate of iX, said: "This merger will create benefits for investors, issuers and intermediaries regardless of their size: all market participants will benefit from lower spreads due to higher liquidity. Especially smaller trading firms will benefit from Xetra's proven track record in providing remote access. Retail investors will benefit from a wider choice of products. iX will provide a level playing field for all market participants."
Frank Zarb, CEO of Nasdaq, commenting today said: "This is an important day for investors throughout Europe and in the history of European financial markets. I believe that the combination of iX and Nasdaq Europe will create a powerful pan-European trading platform, custom-designed for the investment opportunities created by our fast growing digital age."