The New York Stock Exchange (NYSE) is reportedly being sold to rival group InterContinental Exchange (ICE) for a staggering $8.2 billion.
The Atlanta-based company will offer up cash and bonds in exchange for the NYSE. According to BBC News, the deal must be approved by a regulatory community before the sale can officially take place. Experts believe it could be a while before the deal is completed.
“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,” explained ICE chairman and chief executive Jeffrey Sprecher.
Reuters reports Intercontinental Exchange’s acquisition of the NYSE will make the company the third-largest exchange group in the entire world.
NYSE Euronext CEO Duncan Niederauer recently explained that consolidation was essentially “inevitable,” adding that going it alone was something the NYSE could no longer afford to do.
“We can sit here and keep slugging away and keep working hard, but the bottom line is we had not delivered, in my mind, sufficient returns to shareholders,” Niederauer said in a recent call to analysts.
The New York Stock Exchange CEO assured everyone that the group’s iconic trading floor will still remain in operation after the sale has been finalized.
“The floor has value and in particular, it has a lot of brand value. So we are committed,” Niederauer explained.
The Wall Street Journal explains the NYSE’s decision to sell itself to ICE shows the increasing popularity of online trading. Wall Street historian and college professor Charles Geisst believes electronic transactions will eventually replace “open outcry” trading. ICE conducts all of its business online.
“The trading floor is going to become like the Roman Forum. It’ll be a nice place to visit, but nothing much will go on there,” he said.
Although it’s origins date back to 1792, the New York Stock Exchange officially came into existence when the organization penned a constitution in 1817.
What are your thoughts on the sale of the NYSE to InterContinental Exchange?