Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, May 16, 2011

NASDAQ & ICE Drop Bid for NYSE Because of Antitrust Obstacle

The NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. abandoned their joint bid to acquire NYSE Euronext after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the deal.   The department said that the acquisition would have substantially eliminated competition for corporate stock listing services, opening and closing stock auction services, off-exchange stock trade reporting services and real-time proprietary equity data products. 

According to Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division,  “The acquisition would have removed incentives for competitive pricing, high quality of service, and innovation in the listing, trading and data services these exchange operators provide to the investing public and to new and established companies that need access to U.S. stock markets.”

In a release from NASDAQ OMX, its CEO Bob Greifeld said:

"We took the decision to withdraw our offer when it became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies, including the sale of the NYSE SRO and related businesses. We saw a unique opportunity to create more value for stockholders and strengthen the U.S. as a center for capital formation amid an ongoing shift of these vital activities and jobs outside of our country.

"NASDAQ OMX has demonstrated an ability to outperform, whether the comparison is against all other equity exchanges today, or even against the largest derivatives exchanges. We have achieved outstanding earnings growth over the last few years and are confident that our global model features a healthy mix of product diversification and will continue to thrive based on our efficiency and ability to innovate."

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