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NYSE, Deutsche Boerse In Talks To Merge

STEVE INSKEEP, host:

NPR's business news starts with a hot stock tip.

(Soundbite of music)

INSKEEP: An icon of American finance, the New York Stock Exchange, may soon be under foreign ownership. The NYSE is in advanced merger talks with Germany's main stock market.

NPR's Jim Zarroli has more.

Jim ZARROLI: If the deal goes through, and that's not certain yet, it would create the largest financial exchange company in the world.

NYSE Euronext is the company that owns the New York Stock Exchange, as well as exchanges in Paris, Amsterdam and Brussels.

Yesterday, the company says it was in advanced talks to merge with Deutsche Boerse, which owns the Frankfurt Stock Exchange.

Charles Geisst is a Wall Street historian.

Dr. CHARLES GEISST (Wall Street Historian): The company should have a sizable presence, to say the least. It's combining the - probably, outside of London -the two major stock market presences in Europe, with, of course, the NYSE. It should, in fact, be a formidable trading presence.

ZARROLI: The deal is the latest in a string of cross-border mergers between different exchanges, handling a variety of financial products. Once, stock markets like NASDAQ and the New York Stock Exchange processed most of the stock trades that took place in the United States. But with technology, they've had to compete with new, alternative trading platforms that have eaten into their business.

To maintain their strength, they've increasingly joined forces with other markets. This latest deal underscores the diminished role that the New York Stock Exchange plays in global finance. Although the new company would have dual headquarters in New York and Europe, it would be controlled by Deutsche Boerse, which would own 60 percent of the shares of the company. The deal must be approved by regulators on both sides of the Atlantic.

European officials have expressed reservations about such mergers before. But with the traditional stock exchanges under threat from new competitors, regulators may have little choice but to let the deal go through.

Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.