IntercontinentalExchange to buy NYSE for $8.2B
NEW YORK (AP) — The New York Stock Exchange is being sold to a little-known rival in Atlanta for about $8 billion, ending more than two centuries of independence for the iconic Big Board.
The buyer, IntercontinentalExchange, a 12-year-old exchange that deals in investing contracts known as futures, said Thursday that little would change for the trading floor in Manhattan’s financial district.
The NYSE dates to 1792, when 24 brokers and merchants traded stocks under a buttonwood tree on Wall Street. But its importance today is mostly symbolic. Most trading is done on computers that match thousands of orders a second.
“The cash equities business in America has effectively been obliterated,” said Thomas Caldwell, chairman of Caldwell Securities in Toronto and a shareholder in the New York exchange’s parent company, NYSE Euronext.
He said that the jewel of the deal is not the New York exchange but Liffe, a futures exchange founded in London.
Three decades ago, the floor of the New York exchange was full of bustling traders. Today, one of its largest booths belongs to the cable news channel CNBC, which broadcasts there for most of the business day.
The stature of the New York exchange has been dwindling for years because of intensifying competition, a harsher regulatory environment and the declining popularity of stocks as an investment, Caldwell said.
NYSE Euronext has been looking for a deal. Last year, ICE and Nasdaq OMX Group Inc., which competes with the NYSE for stock listings, made an $11 billion bid to buy NYSE Euronext. But that deal fell apart after regulators raised antitrust concerns.
ICE was established in May 2000. Its founding shareholders represented some of the world’s largest energy companies and financial institutions, according to the company’s most recent annual report.
ICE’s stated mission was to transform the energy futures market by providing more transparency.
The company has expanded through a series of acquisitions during the last decade and listed on the NYSE in an initial public offering in November 2005.
Analysts forecast that ICE’s revenues will reach $1.4 billion this year, according to FactSet, a provider of financial data. That’s more than double the $574 million of revenues that the company reported in 2007.
“We believe the combined company will be better positioned to compete and serve customers across a broad range of asset classes by uniting our global brands, expertise and infrastructure,” said ICE Chairman and CEO Jeffrey Sprecher.