The New York Stock Exchange plans to mount a “full court press” at the Davos World Economic Forum to convince European Union commissioners attending to ignore recommendations from their regulatory staff to block the merger of the Big Board with Deutsche-Boerse, FOX Business has learned.
At the Davos meeting, which brings together the world’s most influential economic and political leaders, NYSE officials will stress that the merger would provide economic benefits to the struggling European economies, recently hit by downgrades amid concerns over dangerously high debt levels. One source close to the exchange says the merger could pump $5 billion immediately into the European economy through various market efficiencies.
Continue Reading Below
NYSE officials also plan to address the main concern of EU regulators: that the merger would create a monopoly of exchange traded derivatives. The NYSE plans to say that the derivatives are traded broadly across the world in many exchanges at other venues and there is no monopoly.
Senior executives at the NYSE hope these arguments will convince the full commission to save the $17 billion deal that both sides have worked on for the past year. As first reported by the FOX Business Network, EU regulators alerted the stock exchange that they are recommending to the full commission to nix the deal that will be voted on in February over antitrust concerns. The full commission could over-rule the recommendation of the EU regulatory body but even executives at the NYSE say they face an “uphill battle” convincing the commissioners to overrule regulators' recommendations.
While the Davos Forum will be a pivotal event in its lobbying efforts, the NYSE has already begun to reach out to the “highest levels of European government” including finance ministers in France and Germany, according to one person at the NYSE.
NYSE officials will tell leaders at the Davos summit that the merger of the exchanges will create greater financial activity on the continent, while blocking the merger will keep most financial activity in the UK at the London Stock Exchange. And in dealing with concerns with the merger creating a monopoly, the exchange is expected to argue that the combined entity will be highly regulated thus it will not pose major antitrust issues.