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Euronext
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Euronext N.V. is a pan-European stock exchange based in Paris and with subsidiaries in Belgium, France, Netherlands, Luxembourg, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services. As of 31 January 2006, markets run by Euronext had a market capitalization of US$2.9 trillion, making it the 5th largest exchange on the planet. Euronext merged with NYSE Group to form NYSE Euronext, the "first global stock exchange".
next was formed on 22 September 2000 following a merger of the Amsterdam Stock Exchange, Brussels Stock Exchange, and Paris Bourse, in order to take advantage of the harmonisation of the European Union financial markets.
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Encyclopedia
Euronext N.V. is a pan-European stock exchange based in Paris and with subsidiaries in Belgium, France, Netherlands, Luxembourg, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services. As of 31 January 2006, markets run by Euronext had a market capitalization of US$2.9 trillion, making it the 5th largest exchange on the planet. Euronext merged with NYSE Group to form NYSE Euronext, the "first global stock exchange".
Background
Euronext was formed on 22 September 2000 following a merger of the Amsterdam Stock Exchange, Brussels Stock Exchange, and Paris Bourse, in order to take advantage of the harmonisation of the European Union financial markets. In December 2001 Euronext acquired the shares of the London International Financial Futures and Options Exchange (LIFFE), which continues to operate under its own governance. Beginning in early 2003, all derivatives products traded on its affiliated exchanges trade on LIFFECONNECT, LIFFE's electronic trading platform. In 2002 the group merged with the Portuguese stock exchange Bolsa de Valores de Lisboa e Porto (BVLP), renamed Euronext Lisbon.
Structure and Indices
Euronext has cross-membership and cross-access agreements with the Warsaw Stock Exchange for their cash and derivatives products, and with the Helsinki Exchanges on cash trading; ownership agreements are currently excluded. The Euronext List encompasses all quoted companies. It has two segments; NextEconomy, consisting of companies whose equities are traded continuously and are active in sectors such as information technology and biotechnology, and NextPrime, consisting of companies in more traditional sectors that are traded continuously. Inclusion in the segments is voluntary.
Euronext manages two broad-based indices. The Euronext 100 Index is the blue chip index. The Next 150 Index is a market capitalisation index of the 150 next largest stocks, representing the large- to mid-capitalisation segment of listed stocks at Euronext. The NextEconomy and NextPrime segments each have a price index and a total return index, weighted by market capitalisation and excluding the shares listed in the Euronext 100 Index. The indices have a base date of 31 December 2001, with a starting level of 1000 points. Six NextWeather weather indices for France, launched in January 2002, are among the sector indices planned by Euronext. Exchange traded funds, called trackers, comprise Euronext's NextTrack product segment, and have been introduced on the AEX index, CAC 40, Dow Jones Euro Stoxx 50, and various pan-European regional and sector indices. Euronext has introduced several commodity futures contracts, available to all constituents. Winefex Bordeaux futures are traded on Euronext Paris. Euronext.liffe is the subsidiary of Euronext responsible for all options and futures contracts trading, formed by the merger of the derivatives activities of the various constituents of Euronext with LIFFE.
Euronext.liffe
Euronext.liffe was formed in January 2002 from the takeover of the London International Financial Futures and Options Exchange by Euronext. The derivatives activities of the other constituent exchanges of Euronext (Amsterdam, Brussels, Lisbon and Paris), were merged into Euronext.liffe. Trading is done electronically through the LIFFE CONNECT platform. Euronext.liffe offers a wide range of futures and option products on short-term interest rates, bonds, swaps, equities and commodities.
Volumes in 2004 were split as follows:
- Interest Rate: 313.3 million contracts
- Equities: 468.8 million contracts
- Commodities: 8.0 million contracts
In addition to this, it sells its technology to third parties. Since April 2003, the Tokyo International Financial Futures Exchange has run on LIFFE CONNECT. Furthermore, in January 2004, the Chicago Board of Trade started electronic trading using e-cbot, which is powered by LIFFE CONNECT. As a result, the Kansas City Board of Trade, the Minneapolis Grain Exchange and the Winnipeg Commodity Exchange use LIFFE CONNECT for their overnight trading.
Alternext
Alternext was formed in 2005 by Euronext to help small and mid-class companies in the Eurozone seek financing. Since the merger of Euronext and NYSE since 2006, now completed in 2007, this market is now a division of NYSE Euronext, named NYSE Alternext.
Merger with NYSE
Due to apparent moves by NASDAQ to acquire the London Stock Exchange, NYSE Group, owner of the New York Stock Exchange, offered 8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006, outbidding a rival offer for the European Stock exchange operator from Deutsche Börse, the German stock market. Contrary to statements that it would not raise its bid, on 23 May 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at 8.6 billion (US$11b), 600 million over NYSE Group's initial bid. Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by SEC chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007. The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City, with European operations and its trading platform run out of Paris. NYSE CEO John Thain, who would head NYSE Euronext, intends to use the combination to form the world's first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hope to add Borsa Italiana (the Milan stock exchange) into the grouping.
Deutsche Börse dropped out of the bidding for Euronext on 15 November 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group's stock price in late 2006 made the offering far more attractive to Euronext's shareholders. On 19 December 2006, Euronext shareholders approved the transaction with 98.2% of the vote. Only 1.8% voted in favour of the Deutsche Börse offer. Jean-François Théodore, the Chief Executive Officer of Euronext, stated that they expected the transaction to close within three or four months. Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on 20 December 2006. The merger was completed on 4 April 2007, forming NYSE Euronext.
Merger with Deutsche Börse
On November 25, 2008, Deutsche Börse and NYSE Euronext began merger talks which involved creating a holding company to buyout Deutsche Börse shareholders, then use Euronext to merge into the new corporation.
A deal was reportedly not struck due to valuation differences. However, such a merger would create the largest exchange in history.
See also
External links
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