It Will Only Take is $8.2 Billon in Cash and Stock.

[ by Howard Haykin ]

IntercontinentalExchange, Inc., at age 12, agreed to acquire the 220-year-old holding company of the New York Stock Exchange on Thursday, December 20^th agreed to an $8.2 billion deal that would give control of the longstanding symbol of American capitalism to an upstart competitor.
That deal price is based on ICE's accepted offer of a little over $33 a share - to be be paid in cash and stock.   The combined company intends to maintains headquarters in Atlanta, where ICE is based, and in lower New York.  

Revival on Market Consolidation.   The takeover signals a revivals in he markets for exchanges and market centers, which dropped off significantly after a wave of deals in 2011 slowed down amid concerns that revival of consolidation in the world of market operators, which dropped off in 2011 after a wave of deals dissipated amid concerns over antitrust and nationalist sentiment. 

Yesterday's purchase offer for NYSE Euronext marked ICE's second attempt to acquire NYSE Euronext.  Last year, the exchange  joined forces with Nadaq OMX - NYSE's main rival - to submit a hostile offer valued at $11 billion.  The Justice Department blocked the transaction. Other proposed deals during the 2011 wave included, the following:

• NYSE Euronext pushed heavily to combine with Deutsche Börse, a transaction that would have created a global giant in the derivatives market.  Many U.S. and European regulators and government officials expressed concerns over the possible loss of a historical symbol of American pride and capitalism.  With Deutsche Borse being the suitor and acquirer, the final decision to not give its authorization to the deal largely referring to their own nationalistic concerns.

Terms and Conditions of the Deal and Its Prospects for Smoother Sailing.   The agreed-upon $8.2 billion deal is expected to run into fewer problems.  First we'll look at the terms. 

• ICE and NYSE Euronext have little overlapping business - which minimizes anti-trust concerns.

• ICE focuses largely on commodities trading, including energy products, while NYSE Euronext focuses on stocks, options and security derivatives.

• While some of the NYSE's features are largely symbolic - its 2-century public image - or ceremonial - its opening bell and floor traders - the main attraction for ICE is NYSE Euronexdt's businesses in the OTC derivatives market - which includes the Liffe market in London.

• As part of the deal, ICE will consider spinning off NYSE Euronext's European stock market operations.\

• When the deal concludes, it's expected that NYSE Euronext shareholders will control about 36% of the stock.of the combined company.

• Jeffrey Sprecher, the current ICE CEO, will retain that same role in the newly enlarged market operator.

• NYSE Euronext's CEO Duncan Niederauer, would serve as president.

For further details, go to:   [ Dealbook, 12/20/12 ].