Nasdaq To Buy Sweden's OMX

STOCKHOLM, Sweden - Nasdaq Stock Market, which lost its battle to cross the Atlantic with a failed bid for the London Stock Exchange, agreed Friday to buy Nordic stock exchange operator OMX AB for $3.67 billion.

The acquisition is a breakthrough for Nasdaq, which still owns almost 30 percent of the London exchange and could use the purchase of OMX to persuade LSE shareholders to agree to a deal creating a giant European exchange.

Nasdaq Chief Executive Officer Robert Greifeld tried to avoid commenting on the matter, saying 'this day is about Nasdaq and OMX.'

Later, though, he told a conference call that his position on its LSE stake has not changed. 'We maintain optionality with regard to the London Stock Exchange,' he said.

CEO Magnus Bocker of OMX, the largest stock market in the Nordic region, declined comment on whether he wants to see a combination with LSE. OMX failed in its own attempt to buy the London exchange, in 2000.

However, Bocker, whose company is the result of seven merged Nordic stock exchanges in the past three years, said its ambition 'is to be No. 1 and 2 in our areas, and this is only the beginning of that journey.' This could be through mergers or other forms of cooperation, he said.

Greifeld said 'the future of exchanges is about technology, flexibility and scale. Nasdaq and OMX together deliver all of these benefits.'

The combination between Nasdaq - home to technology bellwethers Dell and Microsoft Corp. - and OMX would provide 'an excellent platform for further expansion into derivatives and other asset classes,' he said.

The offer of 0.502 Nasdaq shares plus 94.30 kronor ($13.76) in cash for each OMX share values the company at $30.38 per share, offering a 19 percent premium over Wednesday's closing price.

OMX shares on Friday rose about 11 percent to $29.12 in Stockholm.

OMX said the boards of both companies had recommended the deal, which also has the support of their main shareholders. The new group is to be called The Nasdaq OMX Group and have its headquarters in New York, with Greifeld as CEO and Bocker as president.

Nasdaq OMX shares will be listed on Nasdaq in the United States and on the OMX Nordic Exchange. Its board will have 15 members - nine from Nasdaq and five from OMX, as well as Greifeld.

The combined group would have a market capitalization of $7.1 billion; revenue for the 2006 fiscal year would have been more than $1.2 billion. The company says it expects cost and revenue synergies of about $150 million in three years.

The deal comes a month after the New York Stock Exchange completed its $14 billion acquisition of Euronext, which operates the stock exchanges in Paris; Amsterdam, Netherlands; Brussels, Belgium; and Lisbon, Portugal. NYSE Euronext formed not only the first trans-Atlantic financial market, but also the world's largest.

It was part of a global rush for exchanges to find partners or be left out of a massive consolidation push.

LSE shares dipped initially after the deal announcement, but recovered to rise nearly 1.3 percent to $26.34.