NYSE Euronext has entered into a definitive agreement to acquire the American Stock Exchange (Amex). The proposed business combination, which has been approved by both companies’ boards of directors, will significantly enhance NYSE Euronext’s scale in U.S. options, exchange-traded funds, closed-end funds, structured products and cash equities.
The two exchanges have been battling each other for ETF listings, along with the Nasdaq. While the Amex has long been known for its pioneer work in the ETF business, it has faced increased competition. In 2005, the exchange suffered a blow when Barclays Global Investors decided to move the majority of its ETF listings to the NYSE.
As a result of the deal, NYSE Arca stands to gain 381 Amex-listed ETFs with about $240 billion in total assets.
Over the past year, the U.S. ETF market has exhibited strong growth. During 2007, industry wide assets increased by approximately $187 billion and 270 new ETFs were launched.
Under terms of the agreement, NYSE Euronext will pay $260 million in NYSE Euronext common stock for the Amex. Subject to approval by Amex members and regulatory approvals, including from the Securities and Exchange Commission and the Department of Justice, this transaction is expected to close in the third quarter of this year and to be accretive to NYSE Euronext’s 2009 earnings.
Ron DeLegge is the San Diego-based editor of www.etfguide.com