Big Deal: TMX/LSE suddenly seems small

Amid the hand-wringing that the merger of the TMX Group with the LSE would be a loss of sovereignty, a return of our old colonial masters, there’s another deal in the works that should knock the wind out of the assertion that this is an afront to Canadian pride.

The Deutsche Borse, the operator of the Frankfurt Stock Exchange, is reportedly “in advanced talks” to merge with the New York Stock Exchange, the very symbol of American capitalism. A report in the New York Times DealBook suggests that this transaction may be even less of a merger of equals than the TMX-LSE tie up. And the NYSE is the one being bought.

The combined entity would unite the markets of 14 countries in Europe, as the NYSE owns the Euronext platform, and Deutsche Borse owns several exchanges on the continent as well.

The deal would reportedly leave New York as the centre of equity trading, with Paris being home to options trading and Frankfurt hosting the derivatives market.

Traditional stock exchanges have come under increasing pressure from new electronic trading networks, which allow high-speed, round-the-clock trading.

Related Story: Little in LSE-TMX deal for investors