At D.Boerse’s request, NYSE talks began in August

By Edward Taylor

FRANKFURT (Reuters) – Merger talks between Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research) and NYSE Euronext (NYX.N: Quote, Profile, Research) went live in August last year at the request of the German exchange’s Chief Executive Reto Francioni, regulatory filings released on Thursday show.

On August 2, 2010 senior management teams of Deutsche Boerse AG and NYSE Euronext met in New York “at the request of Mr. Francioni,” to discuss the possibility of a transaction and “key next steps,” an F-4 form filed with the U.S. Securities and Exchange Commission shows.

Renewed impetus for the deal, which was signed on February 15 this year, came after sporadic contact between NYSE Euronext chief Duncan Niederauer and Francioni going back to the fall of 2008.

Under the plan, Deutsche Boerse would acquire the Big Board parent company for $10.2 billion in stock, creating the world’s top financial exchange, with operations in the United States, Germany, Britain, France, Netherlands, Belgium and Portugal.

In early January 2011, executives from both companies including Niederauer, Francioni and their respective financial advisers met in Zurich “for the purposes of negotiating a transaction.”

There in Switzerland, the concept of a dual headquarters arrangement was agreed, as well as a “combination of the two companies rather than the acquisition of one by the other.”

The parties also reached a preliminary understanding on some of the responsibilities of the chief executive officer and the chairman of the combined company, the filings show.

By January 17, a draft of the terms of the transaction and governance structure was drawn up.

At a further meeting in New York on January 21, the parties reached agreement on the terms the new board of directors would serve.

By January 28, NYSE Euronext and Deutsche Boerse had provided each other access to an electronic data room for due diligence purposes, which allowed the management teams to meet in Amsterdam in early February to negotiate the business combination agreement, financial due diligence, and potential synergies that would flow from a deal.

The filings only make a passing reference to a rival offer for NYSE Euronext, made last week by Nasdaq OMX Group (NDAQ.O: Quote, Profile, Research) and IntercontinentalExchange Inc (ICE.N: Quote, Profile, Research).

“The NYSE Euronext board of directors held a meeting by telephone call that same day to receive initial briefing on receipt of the proposal, but no determination was made with respect to the proposal,” the filing said.

(Reporting by Edward Taylor, editing by Gerald E. McCormick)

At D.Boerse’s request, NYSE talks began in August