DEUTSCHE BÖRSE and NYSE Euronext have formally unveiled their plan to create what would be the largest stock and derivatives exchange run from dual headquarters in Frankfurt and New York.

The move caps a week of frenetic merger activity among the world’s exchanges, but also carries the threat of counter-bids with speculation centred on CME Group, the new group’s main rival.

In New York, the German and US groups appeared to have neutralised a backlash against the prospect of the New York Stock Exchange being absorbed in a group whose majority shareholders are from Deutsche Börse.

Charles Schumer, senior Democratic senator for New York, said: “There are many things to like about this announcement, especially that it will open up new markets to NYSE and keep New York the world’s leading financial centre.”

NYSE Euronext and Deutsche Börse said they were aiming to achieve extra savings of “at least” €100 million from the combination, in addition to synergies of €300 million sketched out last week, through cross-selling of products. The combined group would have revenues of $5.4 billion, and pro forma 2010 earnings before interest, depreciation and amortisation of $2.7 billion.

The transaction would be structured as a combination of Deutsche Börse and NYSE Euronext under a new Netherlands-based holding company, which would list in Frankfurt, New York and Paris.

Duncan Niederauer, the NYSE chief executive, will take the same role at the combined group. He said the name would not be DB-NYSE. “It won’t be ‘The Big Börse’ either. It’s still under discussion.”

Under the terms of the proposed deal, each Deutsche Börse share would be exchanged for one share of the new company, and each share of NYSE Euronext share would be exchanged for 0.47 shares of the new company. That would leave the new company 60 per cent owned by Deutsche Börse shareholders and 40 per cent by NYSE Euronext investors.

Nine of the merged group’s 17 board members (apart from the chief executive and chairman) would be appointed from Deutsche Börse and six from NYSE Euronext.

Reto Francioni, chief executive of Deutsche Börse, would be chairman of the merged group.

The proposed merger is subject to approval by a majority of NYSE Euronext shareholders and by 75 per cent of Deutsche Börse shareholders. – (Copyright The Financial Times Limited 2011)