Nasdaq Stock Market said yesterday it would buy Nordic markets owner OMX AB for $3.7 billion (€2.75 billion), giving it a beachhead for more European deals, including perhaps another run at the London Stock Exchange.

Nasdaq, the second-largest US stock exchange, would also gain access to stock and options markets in Europe as well as OMX's successful exchange technology business.

The Nasdaq deal follows the recent acquisition of Euronext by the owner of the New York Stock Exchange and could pressure the London Stock Exchange and other European rivals to consolidate.

Nasdaq earlier this year failed to win control of the London Stock Exchange, but still owns about a third of the UK exchange and can relaunch a bid in 2008. OMX itself tried to bid for the LSE in 2000.

"The broad perception on the street is OMX will be a good platform for bidding for the LSE," said Adam Compton, who co-heads global financial research at RCM Global Investors in San Francisco.

The acquisition will give Nasdaq some European management, Mr Compton said.

But Nasdaq investors did not seem overjoyed at the deal. The exchange's shares were down $1.12, or 3.3 per cent, at $32.86 in yesterday afternoon's trading.

"OMX is not LSE," said Sang Lee of consulting firm Aite Group. "It's a deal that Nasdaq had to make to continue their expansion, but perhaps shareholders weren't as excited about this as they would have been with a deal with an exchange of LSE's calibre." Nasdaq is taking on more debt for the acquisition, which spurred credit rating agency Moody's Investors Service to change the outlook on Nasdaq's ratings to "negative" from "stable". OMX shares closed up nearly 11 per cent at 199.50 crowns.

The companies expect total pre-tax annual merger benefits of $150 million. - (Reuters)