The Berkshire Hathaway Inc., owned by Warren Buffett made an offer in 2012 to acquire NYSE Euronext, conditioned on the exchange operator selling the European derivatives business of the same. The news was made public by two people with knowledge on this matter. On 28th November, a regulatory filing was made by Berkshire and it is actually “Company A” mentioned in the same. As the offer was not made public, the insider sources chose not to disclose their identities. An advisor to the NYSE Euronext, Peralla Weinberg Partners LP got in touch with Company A, however, the proposal was lower than the bid placed by IntercontinentalExchange Inc. The bid of IntercontinentalExchange was actually worth $8.2 billion and this is the one which was eventually accepted by Euronext. In the document illustrating the bidding, Company A has been described as a big industrial and financial holding company.
Warren Buffett helped turn Berkshire Hathaway Inc. a $200 billion company with investing the premiums from the insurance operations and by acquiring stakes from the Goldman Sachs to General Electric Co. NYSE, on the other hand, owns the biggest exchange by listing values in France, The Netherlands and US. NYSE officials, on 20th December, announced that the company will be acquired by IntercontinentalExchange.
The largest futures exchange in the world, CME Group also approached NYSE in October, 2012 and started negotiations on a probable deal on the derivatives business. An offer was also made to clear for NYSE’s Liffe UK derivatives exchange, but, the process was never made formal by NYSE. When asked on this, the spokesman of NYSE Euronext, Richard Adamonis refrained from making any type of statement. Anita Liskey, the spokeswoman of CME, also chose not to comment. Incidentally, none from Berkshire made any comment on the news of Berkshire bidding either.
IntercontinentalExchange decided to pay $33.12 per share for NYSE’s owner. The proposal was approved by both the boards and the transaction is expected to be completed by end of 2013’s 2nd half. Today, the NYSE Euronext shares were more or less unchanged and each of the shares is currently priced at $33.61.
The European derivatives, incidentally, generated around 19% of the total 3rd quarter revenue of NYSE in 2012. This was 22% less than what these generated a year ago. The statistics was published by NYSE officials in last November.