Love is all around us this December. Getco buys Knight. NASDAQ buys TOM. Afraid to be alone with Christmas, ICE responds with buying NYSE Euronext. Well, they aren’t really after Euronext nor NYSE : the derivative trading business Liffe is the crown jewel.
Time flies. Back in 2000 Euronext was formed with the merger of the exchanges of Amsterdam and Paris and a tiny bit of Brussels. In 2001 the combination bought London International Financial Futures and Options Exchange (LIFFE). NYSE bought all this in 2005.
It puzzles me how energy exchange ICE managed to become the bigger fish in the pond of exchanges. The new ICE-NYSE combination will get rid of Euronext stock market with a public offering. Derivative trading unit Liffe – with all the short term interest rate futures – is what ICE is looking for.
Practical consequences of the deal in Europe will probably be zero in the short run. This will change when the markets will be reshuffled, again. In the meantime, ICE-NYSE is overtaking Deutsche Boerse as number three in exchanges by market value. CME is number two and Hong Kong Exchanges is the biggest. Didn’t know that.