Germans Close to Buying NY Stock Exchange

The raucous cathedral of American capitalism, the New York Stock Exchange, is about to be bought by the Germans. If regulators approve the deal, the acquisition of NYSE Euronext (which owns the NYSE) by Deutsche Börse AG (which owns the Frankfurt stock exchange) would create the world's largest financial exchange. The move is bound to face intense scrutiny from regulators in Europe, where the new operation would dominate trade, and in Washington, where acquisition by a foreign company will pique nationalist sentiment, reports the Wall Street Journal.

Deutsche Börse would own 60% of the combined company, estimated to be worth some $25 billion, while NYSE Euronext shareholders would hold 40%. The operation's incorporation papers would be filed in the Netherlands, and its headquarters would be split between New York and Frankfurt. The AP notes that while the NYSE is already the world's largest stock market, NYSE Euronext isn't the largest exchange company in the US. That title belongs to the $20 billion CME Group, which runs the Chicago Mercantile Exchange. "The real motivation here is really about competing with the CME Group," said the head of a financial markets' research and strategic advisory firm. Increased competition has made stock trading less profitable. So the answer is to get bigger, he said. (More merger stories.)