NASDAQ OMX Group (NDAQ)

Reasons for the Final Offers

The combination of NASDAQ and LSE will bring together two of the world’s leading groups in the global exchange market to the benefit of their respective users and the wider global financial community. A NASDAQ/LSE combination will create a cash equities market place with a total market capitalisation in excess of £6.3 trillion ($11.8 trillion) and over 6,400 listed companies. The enlarged group will benefit from the combined strengths of the two organisations, and will present listed companies, traders, and investors with a broad range of services unmatched by any other marketplace currently operating in the world at highly competitive prices. The combined entity will be well positioned to lead further consolidation and compete effectively with any transatlantic or European combination.

Leading global exchange

The combination of NASDAQ and LSE will create a leading global exchange for listing companies of all sizes, from the largest multinational companies to small, growth companies seeking capital for the first time. The Transaction presents an opportunity to give issuers the ability to dual-list simultaneously in Europe and North America’s most significant financial centres through one common entity for the first time.

Products and customers

The combination of NASDAQ and LSE will provide exchange users with an opportunity to capitalise on growth in the cash equities market on both sides of the Atlantic. The product enhancements and efficiencies which can be generated from the combination of the two organisations’ platforms will bring substantial benefits to exchange users, whether corporate issuers or investors who trade on the NASDAQ and LSE markets. In addition, the combined group will be a key market information services and analytics provider, with distribution to a greater aggregate customer base.

Technology

The combination of NASDAQ and LSE brings together the two world leading fully electronic equities exchanges with the intention to create the pre-eminent, technology-driven, global exchange group. NASDAQ’s previous acquisitions of INET and Brut demonstrate a track record of combining electronic trading systems and, after extensive analysis of the capabilities of each organisation’s systems, extracting cost savings through the elimination of corporate and systems redundancies. The combined group will feature leading trading technology that can be leveraged across multiple asset classes and further extended on a global basis.

Strategic fit

NASDAQ believes that it makes the best partner for LSE from both a market structure and a business perspective.

NASDAQ has a market structure which is similar to that of LSE, with multiple competing market makers supporting highly efficient and deeply liquid electronic limit order book trading. In addition to order book trading, both NASDAQ and LSE support the ability of market makers and broker-dealers to carry out off-order book transactions under the same regulatory and trade reporting umbrella as for order book trades. In addition to securities listing and transaction based trading operations, both businesses provide market information services and develop financial products.

In addition, NASDAQ and LSE are similarly sized organisations with a long history and experience in providing international companies with access to domestic investors and capital.