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NYSE Euronext - Deutsche Borse merger Shouldn't Be Approved

By       Message Elaine Cullen       (Page 1 of 1 pages)     Permalink    (# of views)   1 comment

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View Ratings | Rate It Headlined to H3 2/16/11

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 On Tuesday, NYSE Euronext and Deutsche Borse announced that they were planning on merging the two markets. One of the problems with the agreements is the massive consolidation of these stock exchanges. Another problem is the loss of control of NYSE Euronext with the merger. In the proposed merger, the German Deutsche Borse would get acontrolling 60% share of the merged company.

In 2008, the market capitalization value of NYSE Euronext was valued at $16.7 trillion, while the market capitalization value of Deutsche Borse was valued at $36 billion. Given the massive difference in the size and value between NYSE Euronext and Deutsche Borse, the Deutsche Borse should not be getting majority control of the vastly larger NYSE Euronext. 

 It is even more problematic as a nation with the possible loss of control of the NYSE. The German stock exchanges and regulatory rules and regulations are quite different from the U.S. The German government has much greater direct governmental influence andcontrol over their stock exchange. Their reporting and regulatory rules are much less transparent, open, and stringent than that required by the U.S. government. There is no valid or beneficial reason for U.S. citizens or NYSE Euronext shareholders to allow Germany's Deutsch Borse to take over NYSE Euronext.
As well, German companies have a poor history in relation to mergers with other countrys' companies. In the case of the U.S. company, Chrysler, Daimler Benz, in what it claimed was a "merger of equals" took over Chrysler Corporation. The claims that it was a merger of equals turned out to be fraudulent as a U.S. court later found against Daimler Benz. However, Daimler Benz had already appropriated the larger and more capitalized Chrysler Corporation and began pulling capital illegally from the company. Daimler Benz dumped Chrysler after taking it's capital, taking it off the U.S. stock exchange so it couldn't recapitalize as a U.S. company, and dumped it into the private equity firm Cerberus, leaving it bankrupt, with the U.S. government and U.S. taxpayers having to pick up the pieces. The NYSE Euronext is the primary U.S. stock exchange and it is important that the U.S. keep control of it's own stock exchange. There is no reason for the NYSE Euronext to be sold to Deutsche Borse and it shouldn't be allowed


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My interests are in international politics and economics.I have a journalism degree and post graduate study in economics. I have worked in the automobile and airline industry.

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