Tuesday, April 26, 2011

Sen. Schumer Questions Job Loss Impact of NYSE Takeover

In a letter to Robert Greifeld, CEO of The NASDAQ OMX Group, Inc and Jeffrey Sprecher, CEO of ICE, Senator Charles Schumer (D-NY) expressed concern with the potential impact a NASDAQ/ICE takeover of NYSE Euronext would have on jobs in and around New York City. This would be a major consideration in judging any potential transaction, he said. The NYSE Euronext board of directors has once again reaffirmed its support for the Deutsche Börse transaction, he noted, but NASDAQ and ICE may further revise their proposal or take it directly to NYSE Euronext’s stockholders.

The Senator requested an estimate of expected job losses in the New York City area that would result from a NASDAQ/ICE takeover of NYSE Euronext. The given business rationale for a NASDAQ/ICE transaction appears predicated largely on over $700 million in so-called “cost synergies,'' which to the Senator almost certainly means significant job losses. At his request, NYSE Euronext estimated that the NASDAQ/ICE proposal, if effectuated, would result in the loss of 1,000-1,100 U.S. jobs, including approximately 800 in the New York City area.

Prior to taking additional steps in the acquisition efforts, the Senator wants to know how many jobs would be lost in the New York City area in the event of a NASDAQ/NYSE combination, and an explanation for how the claimed cost synergies would be achieved in light of the estimated level of job losses.