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Made in Germany: NYSE stock trades?

February 9, 2011 | 10:53 am

Talk about outsourcing.

The parent company of the New York Stock Exchange revealed Wednesday that it is in advanced talks to be purchased by the owner of the German stock exchange -- meaning that the citadel of American capitalism soon could be foreign-owned.

Following intensifying market rumors, as well as halting trading in its own stock, NYSE Euronext said it may sell itself to Deutsche Boerse. After trading in shares of NYSE Euronext resumed, the stock -- already up on the rumors -- climbed further. With about two hours left in the trading day, the stock was up $5.30, or 16%, to $38.71.
 
The deal being negotiated calls for Deutsche Boerse to own approximately 60% of the company, the first time in its history that the iconic NYSE would be controlled by a foreign entity. Duncan Niederauer, NYSE Euronext chief executive, would be CEO of the combined company.

In some ways, the potential deal is the next step in the evolution of stock exchanges from nonprofit entities owned by their members to fast-moving companies with publicly traded stocks. The NYSE and many traditional stock exchanges switched to public ownership over the last decade, saying the rapid pace of technology and other forces required them to be more nimble and entrepreneurial.

Amid the continuing threat to traditional trading floors from often faster and cheaper electronic trading systems, exchanges have been merging among themselves and, in some cases, branching into alternative lines of business. The NYSE’s potential deal came only a few hours after London Stock Exchange Group announced a similar deal with TMX Group of Canada.

Still, the idea of the bastion of U.S. stock trading being foreign-owned is a bit jarring.

No word yet on whether stock trades will have “Made in Germany” stamped on them.

-- Walter Hamilton

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