N.Y. Sen. Schumer wants ‘New York’ first in name of merged U.S.-German stock exchange parent
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New York’s senior U.S. senator wants assurance that a merger between the New York Stock Exchange and Germany’s Deutsche Boerse would keep ‘New York’ first in the combined parent company’s name.
Sen. Charles E. Schumer said Sunday that although there were ‘a number of things to like’ about the potential combination, the name of the new entity could be a dealbreaker for him.
‘It is totally logical to keep the NYSE name first,’ Schumer, a Democrat, said in a statement. ‘If for some reason, the Germans sought an alternative option, it could be an indication that they are trying to wield an upper hand in the new company and would seek to make other business decisions that could go against New York.’
The Big Board’s parent, NYSE Euronext, and German stock exchange operator Deutsche Boerse announced last week that they were in merger talks that would give Deutsche Boerse shareholders as much as 60% ownership of the combined company, with NYSE Euronext shareholders owning the rest.
But the companies said they anticipated that the new firm would have dual headquarters in Frankfurt and New York, and that current NYSE Euronext Chief Executive Duncan Niederauer would be CEO of the new firm and would remain in New York.
An announcement of an agreement is expected this week, perhaps as soon as Tuesday.
A rumor over the weekend was that the new company would take the name DB NYSE Group. But NYSE Euronext and Deutsche Boerse said in a statement Saturday that ‘no name has been finalized and we expect any decision on a name would be made at a later date, subject to the successful completion of a merger agreement.’
Schumer, who spoke with Niederauer on Friday and Saturday, said he was told that the two sides were ‘actively negotiating’ the issue of the company name.
The Senate doesn’t vote on corporate mergers but senators conceivably could have influence over federal regulators who must approve any deal.
From Schumer’s statement:
Some may say what’s in a name, but I say a lot. The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger. The New York Stock Exchange is the cradle of American capitalism. It is a national treasure. In America, we start each day in our Congress and in our classrooms with the Pledge of Allegiance, and we also start it with the ringing of the bell on the floor of the Stock Exchange. When the stock exchange reopened after the September 11 attacks, it was a symbol of an entire nation rising back to its feet. The New York Stock Exchange has stood tall during world wars, and even a Depression. It must be preserved after this deal, and it must be preserved with its name intact. Keeping NYSE first in the name is the right thing to do from a business perspective as well. The New York Stock Exchange is the one of the most trusted, preeminent brands in the financial world, with cachet that money simply cannot buy. It would not be in the best interests of the combined company to dilute that brand.
Note that there doesn’t appear to be any question that the New York Stock Exchange itself would retain that name. The issue is over the parent company name. But how many Americans even knew that the current NYSE parent is called NYSE Euronext? (Euronext, a group of markets including the Paris and Brussels exchanges, was bought by the NYSE in 2007.)
Schumer’s full statement follows:
On Friday, I met with NYSE Euronext CEO Duncan Niederauer to receive an update on the company’s proposed merger with Deutsche Borse. I spoke with Duncan again yesterday. I intend to consider any potential deal from the same perspective that I always use: will it keep New York on top as the financial center of the world? In talking to Duncan, there are so far a number of things to like about a potential deal, as it is currently being discussed: --- It will enhance NYSE’s global competitiveness in a rapidly evolving trading industry, especially by giving the company a platform in the important derivatives business. --- NYSE and Deutsche Borse would be equally represented on the Management Committee. --- It will give managerial control of the new operation to the team from NYSE, with Mr. Niederauer installed as the new CEO. --- Job losses would be minimized. It appears the boards could vote on a potential deal very soon. I will continue monitoring the negotiations, and will reserve judgment until a final announcement is made. But let me say in advance that a key factor to consider in judging this deal will be its implementation. For instance, a sticking point that could emerge, even after a deal is announced, is the name of the new entity. From what I am told, the two sides are actively negotiating over this issue, but so far they haven’t come to agreement. Some may say what’s in a name, but I say a lot. The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger. The New York Stock Exchange is the cradle of American capitalism. It is a national treasure. In America, we start each day in our Congress and in our classrooms with the Pledge of Allegiance, and we also start it with the ringing of the bell on the floor of the Stock Exchange. When the stock exchange reopened after the September 11 attacks, it was a symbol of an entire nation rising back to its feet. The New York Stock Exchange has stood tall during world wars, and even a Depression. It must be preserved after this deal, and it must be preserved with its name intact. Keeping NYSE first in the name is the right thing to do from a business perspective as well. The New York Stock Exchange is the one of the most trusted, preeminent brands in the financial world, with cachet that money simply cannot buy. It would not be in the best interests of the combined company to dilute that brand. It is totally logical to keep the NYSE name first. If for some reason, the Germans sought an alternative option, it could be an indication that they are trying to wield an upper hand in the new company and would seek to make other business decisions that could go against New York. The name is an important bellwether of whether this deal is regarded as a merger of equals. The name of the new company will be a critical factor in determining support for this merger, both in the regulatory review process as well as in the court of public opinion. It should be resolved sooner rather than later. If this deal is going to keep New York first in the financial world, it must start by keeping New York first in the name.
-- Tom Petruno