11:56 AM
D.Boerse, NYSE dodge issues to seal deal outline
Addison Ray
By Jonathan Spicer and Philipp Halstrick
NEW YORK/FRANKFURT | Mon Feb 14, 2011 2:42pm EST
NEW YORK/FRANKFURT (Reuters) - Deutsche Boerse (DB1Gn.DE) and NYSE Euronext (NYX.N) have an agreement in principle on the broad outlines of a merger, but are side-stepping thorny political issues, two sources familiar with the plan said.
The two are hammering out a framework deal which focuses on functions and personalities, with Deutsche Boerse Chief Executive Reto Francioni slated to be chairman of what would be the world's largest exchange operator.
NYSE Euronext's general counsel, chief operating officer and global head of technology are set to retain their positions in the combined group, two people familiar with the plan told Reuters on Monday.
The details emerged Monday as Fox Business News reported that CME Group Inc (CME.O), currently the world's top derivatives exchange group, may make a hostile bid for NYSE Euronext, citing bankers.
A spokesman for Chicago-based CME declined to comment. CME officials have been guiding investors away from expectations that the company would jump in on the global merger frenzy.
Last week, the Frankfurt- and New York-based exchange operators revealed the first details of a merger plan that would give Deutsche Boerse shareholders about a 60 percent stake, and name NYSE Euronext's head Duncan Niederauer as chief executive.
Negotiations over a name, and where to locate various operations across the two continents, highlight some of the difficulties in bringing together companies that are both operationally complicated and symbols of national pride.
"There is an agreement in principle on the broad outlines of the deal," a European source familiar with the deal said.
But other people familiar with the situation said some other issues -- like that of job cuts in technology -- still need to be worked out in detail.
Past merger attempts have failed over such issues.
A deal is set to be presented to the boards of NYSE Euronext and to the supervisory board of Deutsche Boerse on Tuesday, people familiar with the matter said. Deutsche Boerse will also publish fourth-quarter results on Tuesday.
A formal deal announcement could come by mid-morning (Eastern Time) on Tuesday, two sources said.
OUTRAGE
In Germany, the deal is being sold as a German takeover of the NYSE or as a merger of equals. Any suggestion that the NYSE management team will be in control counters that public stance and could create an obstacle to the deal getting done.
Deutsche Boerse risks ceding control to NYSE Euronext (NYX.N), a supervisory board member at the German exchange said.
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