After failed attempts to acquire the London Stock Exchange (LSE) Nasdaq is finally pushing into Europe by acquiring Nordic and Baltic market operator OMX in a cash and stock deal worth around $3.7bn (SKr25.1bn).
OMX halted trading in its shares before market close yesterday following heated speculation that a takeover bid for the Swedish company was imminent.
Nasdaq has emerged as the bidder and in a statement released this morning detailing the merger, the two exchanges say the combination will create "the largest global network of exchanges and exchange customers linked by technology".
Under the merger agreement, Nasdaq will pay 0.502 of its own shares plus SKr94.3 in cash for each OMX share. The deal values OMX at $3.67bn, or $30.39 a share, which is a 19% premium to the company's closing price on Wednesday, the last full trading day prior to the announcement.
Nasdaq is paying about 7.6 times sales for OMX compared with about the 10 times that the New York Stock Exchange paid for its $14 billion acquisition of Euronext, according to Bloomberg calculations.
The deal also promises significant cost savings, estimated at $100 million, and 'revenue synergies' of $50 million.
The two exchanges say the deal has been approved by both boards of directors and shareholders representing 16.6% of OMX's outstanding shares have irrevocably agreed to accept the offer.
The combined group, which will be called the Nasdaq OMX Group, will have a market capitalisation of around $7.1 billion with Nasdaq shareholders owning around 72% and OMX stockholders owning the remaining 28%.
Nasdaq CEO Robert Greifeld will become CEO of the enlarged group, while OMX CEO Magnus Bocker who will serve as president.
Commenting on the deal Greifeld says: "The future of exchanges is about technology, flexibility and scale. Nasdaq and OMX together deliver all of these benefits. Our technology leadership and track record in linking trading platforms means we will offer issuers and investors unique benefits."
Bocker says the merger "provides benefits for OMX's global technology customer base, as it enables an increased focus on research and product development in the most important and fastest growing areas of the exchange technology market".
OMX operates the Copenhagen, Stockholm, Helsinki, Iceland, Riga, Tallinn and Vilnius exchanges, providing access to about 80% of the Nordic and Baltic securities markets. Earlier this year the company began rolling out a common trading paltform called Genium, across all the securities exchanges it operates.
Nasdaq had previously been targeting the LSE as a merger partner and although its advances were rebuffed by the LSE board the US exchange has built up a 30% stake in the UK market.
Nasdaq has not stated whether it will now sell its LSE stake, but in today's statement it says the combined Nasdaq OMX Group "will establish a new London presence to capitalise on international growth opportunities".