The London and Frankfurt stock exchanges announced on Wednesday that they will merge, creating Europe's largest stock market and a powerful regional counterweight to Wall Street.
The London exchange and Germany's Deutsche Boerse will each own 50 percent of the new entity, which is to be called i-X, which stands for International Exchanges.
The merger is to be completed by mid-2001 and the headquarters are to be in London.
Under the merger agreement, shares in blue-chip companies will be traded in London, while shares in high-tech firms will be traded in Frankfurt.
Don Cruickshank, chairman-designate of the London Stock Exchange, will be chairman of i-X.
He said on Wednesday that the Frankfurt-London merger is the precursor to a pan-European stock exchange.
The Anglo-German union includes a joint venture agreement with Nasdaq Europe Ltd, the European subsidiary of the technology-heavy U-S Nasdaq market, to create a European market for high-growth stocks.
The London-Frankfurt agreement is subject to approval by British and German regulators, and by stockholders.
London and Frankfurt have been holding link-up talks since 1998.
"I-X will be the leading exchange in Europe. Its the major first step towards an integrated Pan European Market and i-X will be operating as a fully integrated commercial organisation."
SUPER CAPTION: Don Cruickshank, Chairman-Designate of the London Stock Exchange and future chairman of i-X
"We came to the conclusion that the way to achieve the benefits that the users want to see is by a total merger of our interests, to create a bigger, European stock market, with greater liquidity, better price formation, lower costs to the users and to eliminate overlaps between our businesses."
SUPER CAPTION: Gavin Casey, current chief executive of the London Stock Exchange
"London has earned big credentials with its successful information services. We are happy to contribute our technology and internet competence so i-X will be a leader in technology"
SUPER CAPTION: Werner Seifert, head of the Frankfurt Stock Exchange and future i-X Chief executive
"It's good for everybody. It's a win-win situation. For the investor, this transaction means greater liquidity, more transparency and fairer prices combined with a potential and most probable decrease of total costs for the investor."
SUPER CAPTION: Rolf E. Breuer, Chairman Deutche Bourse
"I think to begin with we're going to see Germany and the U.K. involved, it'll be very quickly that we'll see France, Spain, Italy and eventually we'll see all the markets of Europe combined into one marketplace so that you'll be able to trade, everybody, all over Europe will be able to trade, all the markets in the one single spot."
SUPER CAPTION: Stan Adams, Director of Advisory Services for Barclays
"I think it will add to stability where there's more value and more money in the market and there's a greater number of decent sized companies that we can get access to in the U.K. for individuals. Mainly private clients in the U.K. don't look at European stocks so that will give greater ability for portfolios to track European markets as well."
SUPER CAPTION: Matthew West, Stockbroker
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