NYSE last night reached agreement to buy Paris-based Euronext for about €7.78 billion ($9.96 billion).
Termed a merger of equals by the pair, the new company will be called NYSE Euronext.
It will have US headquarters in New York, international headquarters in Paris and Amsterdam and its derivatives business in London. NYSE CEO John Thain will be chief executive of the combined group.
Under the terms of yesterday's deal, Euronext shareholders will be offered the right to exchange each of their shares for 0.98 shares of NYSE Euronext stock and €21.32 in cash. Based on yesterday's closing prices, the deal values Euronext at about €7.78 billion ($9.96 billion).
Euronext will also pay a previously announced extraordinary distribution of €3 per share.
The companies said the combined NYSE Euronext would have a market capitalisation of about €15 billion.
Pressure has been intensifying on stock exchanges globally to combine to cut costs and increase execution speed. But despite consolidation occurring within Europe and the United States, there had not been a major deal that links exchanges between the two continents.
The race kicked off earlier this year when Nasdaq Stock Market, the second largest equities exchange, made an offer for the London Stock Exchange (LSE) that was rebuffed.
It has since accumulated a stake of more than 25 per cent in the LSE, although under UK takeover rules it is forbidden from launching a takeover bid for six months.