The failure of the proposed merger between NYSE Liffe and Deutsche Bourse in February was one of a number of similar failed deals that cost exchanges dear in terms of lost time and fees. Now, strategies are shifting in favour of strategic partnerships and linkage deals with other exchanges.
The blocked merger was the latest in a series of high profile
failed mergers and the general consensus seems to be that there
will be no more "mega mergers" between exchanges in the near
future, aside from the ongoing deal to buy the London Metal
But with the pressure to expand, consolidate and increase
global presence being felt as strongly as ever by the
exchanges, it is unsurprising that they are now looking at
alternative methods to do this without the cost and risk
entailed with a full scale merger.
This trend has seen the return of linkage deals, a key method
of exchange growth during the 1990s. Exchange linkage deals
fell off the table in the wake of easy money and relaxed
competition rules that dominated the first decade of the
Century. CME has gradually been building up its international
reach and there have been other deals over the past decade but
not on the scale of the 1990s.
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