NYSE Euronext purchase ‘would have been blocked’

THE US Department of Justice says that it would have sued to block NYSE Euronext’s purchase by Nasdaq OMX Group and Intercontinental Exchange, saying a deal might curb competition in the world’s biggest stock market.

Nasdaq OMX and ICE withdrew their unsolicited offer yesterday, removing an obstacle for Deutsche Boerse to complete its purchase of NYSE Euronext.

Anti-trust regulators said that a combined NYSE Euronext and Nasdaq OMX would have eliminated competition in US corporate listings, auctions at the open and close of the daily trading session, reporting of off-exchange trading and real-time data feeds.

The decision likely clears the way for Deutsche Boerse to buy the owner of the New York Stock Exchange. NYSE Euronext agreed to be bought by Frankfurt-based Deutsche Boerse on February 15, creating the world’s largest exchange operator.

The NYSE Euronext board twice rejected a rival proposal from Nasdaq OMX and ICE, saying the unsolicited offer would lead to too much debt and regulatory opposition.

“The companies’ decision to abandon their bid for NYSE Euronext eliminates the competitive concerns developed during our investigation,” Christine Varney, assistant attorney general in charge of theDepartment of Justice’s anti-trust division said.

“The acquisition would have removed incentives for competitive pricing, high quality of service, and innovation in the listing, trading and data services these exchange operators provide.”

Senator Charles E Schumer, a Democrat from New York, said yesterday in a statement that the combination of NYSE and Deutsche Boerse has more potential to keep jobs in New York and strengthen New York’s position in the derivatives markets.

“The potential takeover of NYSE by Nasdaq had significant anti-trust problems,” he said.