Just weeks after the 214-year-old New York Stock Exchange (NYSE) changed from a members only club to a publicly traded company, it let the world know that it's not sitting on its laurels.
Earlier this week, The NYSE Group made a cash and stock offer of 8 billion euros (roughly $10.2 billion) to buy Euronext N.V.—a Paris-based pan-European stock exchange with operations in London, Brussels, Amsterdam and Paris—and create the world's first transcontinental stock exchange.
Euronext is the second largest stock exchange and the second largest futures exchange in Europe by market value.
NYSE still must beat out rival European exchange Deutsche Boerse, whose acquisition offer for Euronext was rejected late last week.
At Euronext's annual meeting on Tuesday, shareholders encouraged the pan-European exchange to combine with either NYSE or the Deutsche Boerse. Although company management and advisors seemed to back a deal with NYSE, the following few weeks could witness fierce competition between NYSE and Deutsche Boerse to come up with the most attractive offer.
"There's some extra value to be created by having transatlantic mergers," Philip Guziec, an analyst at Morningstar Investment Service, told Bloomberg. "The pools of investors in the U.S. and Europe will be viewed as one pool a decade from now, and in order to enable that you need an exchange footprint on both sides of the Atlantic."
The merger would give the stock-only NYSE an increasingly lucrative futures-trading operation and a huge presence across Europe.
No matter which partner Euronext chooses, further consolidation of stock exchanges will soon become the norm.
NYSE's main U.S. rival, NASDAQ, owns a 25.1-percent stake in London Stock Exchange (LSE), and is aiming to acquire the rest of the company. In March, NASDAQ withdrew a $4.2 billion offer, which was deemed too low by LSE. For now, NASDAQ has some veto power to thwart an outside hostile takeover of LSE, Europe's largest exchange.
So what's in the frenzy? Investors and listed companies are demanding lower trading costs, more securities choices such as options and futures, and choices to list their stock across national borders.
In a transatlantic exchange, public companies could easily tap into new markets and gain access to millions of new investors. European corporations could see their stocks trading in the U.S. without having to adhere to strict SEC regulations.
Combined exchanges will be able to trade virtually any stock from both continents, while expanding the typical trading day and increasing revenues for exchanges.
Deutsche Boerse is expected to counter-bid with a high offer for Euronext, and more attractive terms are likewise anticipated from the NYSE before the deal closes.
However, expect U.S. and European regulators to closely scrutinize any such deal before approval, and transatlantic trading could take years to get approved and implemented.
On Monday NYSE CEO John Thain told analysts in a conference call, "It's not enough to build a champion of Europe. The challenge today is really to build the best marketplace in the world."
Make that two giant marketplaces—one in New York and one in Paris.
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