NASDAQ and IntercontinentalExchange on Monday withdrew their joint US$11 billion bid for the parent of the New York Stock Exchange (NYSE) after the US Department of Justice informed the companies that it would pursue a lawsuit to block the deal.
“NYSE and NASDAQ are iconic ... they are fierce competitors,” said Christine Varney, assistant attorney general of the antitrust division of the Department of Justice, in a conference call. “If these two competitors had merged, it would have effectively created a monopoly leading to higher prices, inferior service and less innovation.”
The decision by the two exchanges to back off clears an obstacle to NYSE Euronext Inc’s previous US$10 billion deal to combine with the German exchange operator Deutsche Boerse. The withdrawal of the competing bid makes it unlikely that the German exchange will feel compelled to raise its lower bid.
Varney pointed out that 100 percent of the top 500 companies based in the US are listed in either NYSE or NASDAQ. The merger would have substantially eliminated competition for such corporate stock listing services and other data products.
NASDAQ OMX CEO Bob Greifeld said in a statement on Monday that the companies had offered a variety of “substantial remedies” to try to secure regulatory approval, including the sale of the NYSE Self-Regulatory Organization and its related businesses.