IntercontinentalExchange (NYSE: ICE), a leading operator of global
markets and clearing houses, and NYSE Euronext (NYSE: NYX), the
preeminent global equity, equity options and fixed income derivatives
market operator, today announced a definitive agreement for ICE to
acquire NYSE Euronext in a stock-and-cash transaction. The acquisition
combines two leading exchange groups to create a premier global exchange
operator diversified across markets including agricultural and energy
commodities, credit derivatives, equities and equity derivatives,
foreign exchange and interest rates. With leading clearing capabilities,
the combined company will be well positioned to deliver efficiencies
while serving customer demand for clearing and risk management globally.
Under the terms of the agreement, which was unanimously approved by the
Boards of both companies, the transaction is currently valued at $33.12
per NYSE Euronext share, or a total of approximately $8.2 billion, based
on the closing price of ICE’s stock on December 19, 2012. NYSE Euronext
shareholders will have the option to elect to receive consideration per
NYSE Euronext share of (i) $33.12 in cash, (ii) 0.2581
IntercontinentalExchange common shares or (iii) a mix of $11.27 in cash
plus 0.1703 ICE common shares, subject to a maximum cash consideration
of approximately $2.7 billion and a maximum aggregate number of ICE
common shares of approximately 42.5 million. The overall mix of the $8.2
billion of merger consideration being paid by ICE is approximately 67%
shares and 33% cash. The transaction value of $33.12 represents a 37.7%
premium over NYSE Euronext’s closing share price on December 19, 2012.
NYSE Euronext shareholders will own approximately 36% of ICE shares
The cash portion of the transaction will be funded by a combination of
cash on hand and existing ICE credit facilities.
The transaction is expected to close in the second half 2013, subject
to regulatory approvals in Europe and the U.S. and approval by
shareholders of both companies.
The majority of run-rate expense synergies of $450 million are
expected to be achieved in the second full year post-closing.
Earnings accretion of greater than 15% is expected in the first year
As a result of the transaction, ICE clearing will be more capital
efficient and provide operational efficiencies for clearing members.
ICE is committed to preserving the NYSE Euronext brand. ICE will
maintain dual headquarters in Atlanta and New York. New York
headquarters will be located in the Wall Street building, home to the
iconic trading floor. ICE will also open a new midtown Manhattan
office in June 2013.
ICE is also committed to maintaining the position of NYSE Liffe in
London as a leading international market operator for derivatives
products, including its benchmark interest rate complex.
ICE intends to explore an initial public offering of Euronext as a
Continental European-based entity following the closing of the
acquisition if market conditions and European policy makers support
Jeffrey C. Sprecher will continue as Chairman and CEO of the combined
company and Scott A. Hill as CFO. Duncan L. Niederauer will be
President of the combined company and CEO of NYSE Group. Four members
of the NYSE Euronext Board of Directors will be added to the ICE Board
of Directors which will be expanded to 15 members.
"Our transaction is responsive to the evolution of market infrastructure
today and offers a range of growth opportunities, while enhancing
competition in US and European markets and broadening our ability to
address new markets and offer innovative products and services on a
global platform," said ICE Chairman and CEO Jeffrey C. Sprecher. "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. With a track record of
growth and returns, clearing and M&A integration, we are well positioned
to transform our combined companies into a premier global exchange
operator that remains a leader in market evolution."
“The Board of NYSE Euronext carefully considered a range of strategic
alternatives and concluded that ICE is the ideal partner for NYSE
Euronext in an evolving market landscape," said Jan-Michiel Hessels,
Chairman of the Board of NYSE Euronext. "We look forward to working with
ICE to complete this compelling, value-enhancing combination."
“This transaction leverages the strength of our iconic brand and the
value we have created in our global equity and derivatives franchises –
positioning the business for solid long-term growth and development,”
said Duncan L. Niederauer, CEO of NYSE Euronext. “We are bringing
together two highly complementary businesses, creating an end-to-end
multi-asset portfolio that will be strongly positioned to serve a global
client base and capture current and future growth opportunities.”
Benefits of the transaction include:
Acquisition will unlock significant value through the achievement of
merger related cost synergies. ICE has successfully integrated more
than a dozen acquisitions in the last decade, with a track record of
delivering on or exceeding synergy commitments.
The transaction is expected to be highly accretive to earnings in the
first year after closing and produce returns on invested capital above
the transaction’s cost of investment beginning in year two.
Model delivers strong operating leverage while preserving healthy
levels of recurring revenues and participation in a market recovery,
positioned to perform well in a rising interest rate and improved
equity market environment.
Strong cash flows and balance sheet of the combined company support
continued investments in growth initiatives while facilitating rapid
deleveraging post-close. ICE, upon closing of the transaction intends
to adopt a dividend policy that will provide for an annual dividend
payment of approximately $300 million. This amount represents the
aggregate amount of NYSE Euronext’s current annual dividend payment.
Provides for diversification among multiple asset classes and expands
ICE’s reach into new markets, including the world’s largest asset
class - interest rates - at current cyclical lows.
Acquisition creates an unparalleled operator of global exchanges and
clearing houses for agricultural and energy commodities, credit
derivatives, equities and equity derivatives, foreign exchange and
Benefits from strong global presence, infrastructure and brands across
NYSE Liffe execution and clearing will be merged into ICE Clear
Europe, creating an efficient clearing model poised for growth as
interest rate markets recover and interest rate swap clearing develops.
ICE has proven transition capabilities and successfully launched ICE
Clear Europe in November 2008, transferring approximately 26.5 million
contracts and over $16 billion in initial margin.
Competition and Market Structure
Builds on track record of improving market transparency and expands
resources to address challenges and opportunities in equity market
Enhances innovation and competitiveness within U.S. and European rate
Operational and capital efficiency in implementation of new regulatory
requirements with compliant solutions already in place.
Emphasis on market safety and security via high-performance,
integrated technology infrastructure.
ICE’s lead financial advisor is Morgan Stanley; further financial advice
is being provided by BMO Capital Markets Corp., Broadhaven Capital
Partners, JPMorgan, Lazard, Societe Generale Corporate & Investment
Banking, and Wells Fargo Securities, LLC. ICE legal advisors are
Sullivan & Cromwell LLP and Shearman & Sterling LLP. The principal
financial advisers to NYSE Euronext are Perella Weinberg Partners and
BNP Paribas. Legal advisers to NYSE Euronext are Wachtell, Lipton, Rosen
& Katz, Slaughter & May, and Stibbe N.V. Further financial advice to
NYSE Euronext is being provided by Blackstone Advisory Partners,
Citigroup, Goldman Sachs & Co. and Moelis & Co.
Investor Conference Call
An investor conference call will be held at 8:45 a.m. ET/1:45 p.m. GMT
today, December 20, 2012, and is available via the ICE and NYSE Euronext
websites. U.S. participants may dial 1 (866) 700-7441 and international
participants may dial +1 (617) 213-8839. The participant code is
20593477. The call will be available for replay on each investor
website. Media may participate in the call on a listen-only basis.
About IntercontinentalExchange, Inc.
IntercontinentalExchange, Inc. (NYSE: ICE) is a leading operator of
regulated futures exchanges and over-the-counter markets for
agricultural, credit, currency, emissions, energy and equity index
contracts. ICE Futures Europe hosts trade in half of the world’s crude
and refined oil futures. ICE Futures U.S. and ICE Futures Canada list
agricultural, currencies and Russell Index markets. ICE is also a
leading operator of central clearing services for the futures and
over-the-counter markets, with five regulated clearing houses across
North America and Europe. ICE serves customers in more than 70
countries. For more information, please visit: www.theice.com.
The following are trademarks of IntercontinentalExchange, Inc. and/or
its affiliated companies: IntercontinentalExchange;
IntercontinentalExchange & Design; ICE; ICE and block design; ICE
Futures Canada; ICE Futures Europe; ICE Futures U.S.; ICE Clear Credit;
ICE Clear Europe; ICE Clear U.S.; ICE Clear Canada; The Clearing
Corporation; U.S. Dollar Index; ICE Link and Creditex. All other
trademarks are the property of their respective owners. For more
information regarding registered trademarks owned by
IntercontinentalExchange, Inc. and/or its affiliated companies, see https://www.theice.com/terms.jhtml.
About NYSE Euronext
NYSE Euronext (NYSE: NYX) is a leading global operator of financial
markets and provider of innovative trading technologies. The company’s
exchanges in Europe and the United States trade equities, futures,
options, fixed-income and exchange-traded products. With approximately
8,000 listed issues (excluding European Structured Products), NYSE
Euronext’s equities markets – the New York Stock Exchange, NYSE
Euronext, NYSE MKT, NYSE Alternext and NYSE Arca – represent one-third
of the world’s equities trading, the most liquidity of any global
exchange group. NYSE Euronext also operates NYSE Liffe, one of the
leading European derivatives businesses and the world’s second-largest
derivatives business by value of trading. The company offers
comprehensive commercial technology, connectivity and market data
products and services through NYSE Technologies. NYSE Euronext is in the
S&P 500 index. For more information, please visit: http://www.nyx.com.
This press release may contain “forward-looking statements” made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. In some cases, you can identify
forward-looking statements by words such as “may,” “hope,” “will,”
“should,” “expect,” “plan,” “anticipate,” “intend,” “believe,”
“estimate,” “predict,” “potential,” “continue,” “could,” “future” or the
negative of those terms or other words of similar meaning. You should
carefully read forward-looking statements, including statements that
contain these words, because they discuss our future expectations or
state other “forward-looking” information. Forward-looking statements
involve a number of risks and uncertainties. ICE and NYSE Euronext
caution readers that any forward-looking statement is not a guarantee of
future performance and that actual results could differ materially from
those contained in the forward-looking statement. Such forward-looking
statements include, but are not limited to, statements about the
benefits of the proposed merger involving ICE and NYSE Euronext,
including future financial results, ICE’s and NYSE Euronext’s plans,
objectives, expectations and intentions, the expected timing of
completion of the transaction and other statements that are not
historical facts. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking
statements are set forth in ICE’s and NYSE Euronext’s filings with the
U.S. Securities and Exchange Commission (the “SEC”). These risks and
uncertainties include, without limitation, the following: the inability
to close the merger in a timely manner; the inability to complete the
merger due to the failure of NYSE Euronext stockholders to adopt the
merger agreement or the failure of ICE stockholders to approve the
issuance of ICE common stock in connection with the merger; the failure
to satisfy other conditions to completion of the merger, including
receipt of required regulatory and other approvals; the failure of the
proposed transaction to close for any other reason; the possibility that
any of the anticipated benefits of the proposed transaction will not be
realized; the risk that integration of NYSE Euronext’s operations with
those of ICE will be materially delayed or will be more costly or
difficult than expected; the challenges of integrating and retaining key
employees; the effect of the announcement of the transaction on ICE’s,
NYSE Euronext’s or the combined company’s respective business
relationships, operating results and business generally; the possibility
that the anticipated synergies and cost savings of the merger will not
be realized, or will not be realized within the expected time period;
the possibility that the merger may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
diversion of management’s attention from ongoing business operations and
opportunities; general competitive, economic, political and market
conditions and fluctuations; actions taken or conditions imposed by the
United States and foreign governments and regulatory authorities; and
adverse outcomes of pending or threatened litigation or government
investigations. In addition, you should carefully consider the risks and
uncertainties and other factors that may affect future results of the
combined company described in the section entitled “Risk Factors” in the
joint proxy statement/prospectus to be delivered to ICE’s and NYSE
Euronext’s respective shareholders, and in ICE’s and NYSE Euronext’s
respective filings with the SEC that are available on the SEC’s web site
located at www.sec.gov,
including the sections entitled “Risk Factors” in ICE’s Form 10−K for
the fiscal year ended December 31, 2011, as filed with the SEC on
February 8, 2012, and ICE's Quarterly Reports on Form 10-Q for the
quarters ended June 30, 2012, as filed with the SEC on August 1, 2012
and September 30, 2012, as filed with the SEC on November 5, 2012, and
“Risk Factors” in NYSE Euronext’s Form 10−K for the fiscal year ended
December 31, 2011, as filed with the SEC on February 29, 2012. You
should not place undue reliance on forward-looking statements, which
speak only as of the date of this press release. Except for any
obligations to disclose material information under the Federal
securities laws, ICE undertakes no obligation to publicly update any
forward-looking statements to reflect events or circumstances after the
date of this press release.
Important Information About the Proposed Transaction and Where to
In connection with the proposed transaction, ICE intends to file with
the SEC a registration statement on Form S−4, which will include a joint
proxy statement/prospectus with respect to the proposed acquisition of
NYSE Euronext. The final joint proxy statement/prospectus will be
delivered to the stockholders of ICE and NYSE Euronext. Investors and
security holders of both ICE and NYSE Euronext are urged to read the
joint proxy statement/prospectus regarding the proposed transaction
carefully and in its entirety, including any documents previously filed
with the SEC and incorporated by reference into the joint proxy
statement/prospectus, when it becomes available because it will contain
important information regarding ICE, NYSE Euronext and the proposed
merger. Investors will be able to obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information
about ICE and NYSE Euronext, without charge, at the SEC’s website at http://www.sec.gov/.
Investors may also obtain these documents, without charge, from ICE’s
website at http://www.theice.com.
Participants in the Merger Solicitation:
ICE, NYSE Euronext and their respective directors, executive officers
and other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
transactions contemplated by the merger agreement.
You can find information about ICE and ICE’s directors and executive
officers in ICE’s Annual Report on Form 10-K for the year ended December
31, 2011, as filed with the SEC on February 8, 2012, and ICE’s proxy
statement for its 2012 annual meeting of stockholders, as filed with the
SEC on March 30, 2012.
You can find information about NYSE Euronext and NYSE Euronext’s
directors and executive officers in NYSE Euronext’s Annual Report on
Form 10-K for the year ended December 31, 2011, as filed with the SEC on
February 29, 2012, and NYSE Euronext’s proxy statement for its 2012
annual meeting of stockholders, filed with the SEC on March 26, 2012.
Additional information about the interests of potential participants
will be included in the joint proxy statement/prospectuses, if and when
it becomes available, and the other relevant documents filed by ICE and
NYSE Euronext with the SEC.
This announcement does not constitute an offer or any solicitation of
any offer, to buy or subscribe for any securities.
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