WASHINGTON — Nasdaq OMX Group Inc. and IntercontinentalExchange Inc.’s $11.3 billion bid for NYSE Euronext could raise larger U.S. antitrust concerns than the proposed union of the NYSE and Germany’s Deutsche Boerse AG because the merger would join the two largest stock-exchange operators in the U.S.
Concern about such a deal could come from the companies that pay exchanges for listing shares on the public market. Nasdaq and NYSE are the only two players in the U.S. for such services.
“A combined NYSE-Nasdaq entity could have substantial pricing power in the listing business,” Lawrence Harris, a University of Southern California finance professor, said in written testimony Friday presented to a U.S. House panel. “Such concentration also could reduce innovation in listing standards, which might not be in the public interest,” he said.
Nasdaq and IntercontinentalExchange acknowledged the potential antitrust concerns in a statement announcing their bid. “We recognize that our proposal creates a greater competitive issue in the U.S. than the Deutsche Boerse proposal. However, we are confident that this issue can be satisfactorily resolved,” the companies said.
“The parties are arguing that their primary competitors are outside of the U.S. and, therefore, the geographic market is broader,” said Jonathan Grossman, an antitrust lawyer at Cozen O’Connor in Washington.
If U.S. antitrust regulators accept that argument, they probably won’t challenge a NYSE-Nasdaq combo, Grossman said.
