NYSE Euronext looks beyond failed merger

AP News
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Posted: Feb 10, 2012 3:42 PM
NYSE Euronext looks beyond failed merger

The parent company of the New York Stock Exchange, after losing a bruising battle with European regulators over merging with a German exchange, says it will focus on expanding high-tech trading and adding services for its clients.

NYSE Euronext CEO Duncan Niederauer told analysts Friday that the company will also look at smaller acquisitions. He said he did not expect further attempts at mergers with major global exchanges.

"The proposed merger was a great opportunity," he said. "I'm still glad we tried, but unfortunately the outcome was not what we had hoped for."

Investors sent the stock up 4.6 percent Friday to $28.97, the best-performing stock in the Standard & Poor's 500.

The European Union said Feb. 1 that it would block the union of NYSE and Deutsche Boerse because of concerns about a monopoly. Deutsche Boerse and NYSE Euronext had hoped to compete better with other large exchanges in the U.S. and Asia.

The technology investments have already paid off for NYSE Euronext, accounting for an 11 percent increase in revenue in that unit to $127 million in the last three months of 2011.

Overall, the costs related to the collapsed merger caused a slump in fourth quarter earnings. The company, which owns the main exchanges in New York and Paris among others, reported net income of $110 million, or 43 cents per share, for the three months ended Dec. 31. That compares with $135 million, or 51 cents per share, in the same quarter the previous year.

Earnings were hit by $46 million in merger expenses and exit costs, largely from the collapsed Deutsche Boerse deal, the company said in a statement.

Adjusted for merger costs, a one-time tax expense in France, and other items, profit came to 50 cents per share. Revenue was flat at $1.05 billion.