Some exchange executives turn cool on merger mania

By Maria Aspan and Jonathan Spicer

NEW YORK (Reuters) – Executives from some of the world’s top exchanges downplayed the wave of mergers sweeping their industry by casting doubts on the deals’ eventual success.

Even Duncan Niederauer, whose NYSE Euronext is trying to complete one of the industry’s largest mergers with Deutsche Boerse AG, said Friday he thinks his company’s separate bid for European clearinghouse LCH.Clearnet is unlikely to win the day.

“I think LCH is likely to stand alone,” Niederauer, Chief Executive of the Big Board parent, said on the sidelines of a conference hosted by Sandler O’Neill. “But I thought it was an opportunity to work with the banks.”

NYSE Euronext recently partnered with Markit, which is owned by banks and others, to bid for London-based LCH.Clearnet.

Niederauer added that the bid for the European clearinghouse would not change the dynamics of NYSE’s planned $10.2 billion deal with Deutsche Boerse.

Several other top exchange executives threw cold water Friday on the consolidation frenzy sweeping the industry, kicked off late last year by Singapore Exchange Ltd’s failed attempt to buy Australian market operator ASX Ltd.

The Australian government blocked that deal earlier this year, excluding Singapore from the current wave of industry deals. Singapore Exchange CEO Magnus Bocker warned his competitors Friday that size alone would not help them succeed.

“There is a danger if you think that scale is survival,” he told reporters. “Size will never be the single winner in this.”

He said during a presentation at the conference that it was a bit “sad” from Australia’s perspective that the door was closed to the planned cross-border tie-up.

Other executives whose exchanges are sitting on the sidelines also defended their positions, expressing doubts that much of the industry would succeed in partnering up.

“You’re seeing some of these deals are difficult to complete,” CME Group Inc CEO Craig Donohue told the conference.

“When you get beyond intra-North American or intra-Europe, or maybe even trans-Atlantic between Western Europe and North America, I think these deals become more difficult on many different levels. Certainly on the national, political and regulatory level,” he said.

All of the executives were in New York for a two-day exchanges conference hosted by Sandler O’Neill. (Reporting by Maria Aspan and Jonathan Spicer, editing by Gerald E. McCormick)