Saturday, December 6, 2008

Giant merger could mean more as exchanges eye OTC

NEW YORK/CHICAGO (Reuters) - The possible combination of exchange giants NYSE Euronext and Deutsche Boerse could unleash a wave of mergers as the industry prepares to tackle the over-the-counter market.

It would also shake the competitive balance among market operators in Europe and the United States.

German magazine Der Spiegel reported that the top U.S. and German exchange operators are planning a merger, citing an internal paper it said Deutsche Bourse's CEO presented to company management.

Together, the companies would run stock exchanges in Frankfurt, Paris, Amsterdam, Brussels, Lisbon and New York, and would handle the most U.S. listed options volume by far.

Such a deal would create a mammoth exchange operator handling scores of products and boasting deep liquidity, but would face big regulatory hurdles, analysts said on Saturday.

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