After ICE-NYSE Merger, Will CME Try to Buy NASDAQ?

Banking, finance, and taxes

Published: December 20, 2012 3:27 pm

Last Updated: April 27, 2020 3:18 pm

The IntercontinentalExchange Inc. (NYSE: ICE) is about to get a serious makeover. With its $9.4 billion market value, the futures exchange is acquiring the NYSE Euronext Inc. (NYSE: NYX). This is no merger of equals either as this is the NYSE Euronext becoming a subsidiary of the ICE.

The real value here is not just the floor operation of the New York Stock Exchange. In fact, that may actually be a drag holding the NYSE value down to under $8 billion today. To prove the point, the NYSE share price of $32.00 and change after the buyout compares to a share price peak above $90 back in 2007 before the recession.

This begs a question. With exchange mergers continuing to take hold, will CME Group Inc. (NASDAQ: CME) with its $17 billion market value go after the Nasdaq OMX Group Inc. (NASDAQ: NDAQ) and its $4.3 billion market value. The CME competes against ICE and the NASDAQ and NYSE are longstanding rivals. The NASDAQ and ICE were looking for a NYSE bid in 2011 and the Deutsche Boerse merger with NYSE was blocked. Recent reports showed that the CME was interested in buying the NYSE.

This brings up a simple yet serious question. Will CME go after NASDAQ? The answer is not so simple. Stay tuned. The global consolidation of financial exchanges is not yet finished.

JON C. OGG

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