NYSE Euronext is to acquire the American Stock Exchange for US$260 million in common stock.

The proposed business combination, which has been approved by both companies’ boards of directors, will enhance NYSE Euronext’s scale in US options, exchange traded funds, closed-end funds, structured products and cash equities.

It will also give the NYSE: a second U.S. option exchange license; provide additional volume to its US options business; and, a third, complementary cash equities exchange. The firms expect to generate annualized cost synergies of over US$100 million within two years from closing, including technology, data center and staff integration, consolidation of professional and contract services and vendors; and, they will relocate Amex’s trading floor operations to the NYSE trading floor.

Under terms of the agreement, NYSE Euronext will pay US$260 million in NYSE Euronext common stock for the Amex. In addition, Amex members will be entitled to receive additional shares of NYSE Euronext common stock based on the net proceeds from the expected sale of Amex’s lower Manhattan headquarters.

Subject to approval by Amex members and customary regulatory approvals, including from the U.S. Securities and Exchange Commission and Department of Justice, this transaction is expected to close in the third quarter of this year and to be accretive to NYSE Euronext’s 2009 earnings.

“The addition of the American Stock Exchange to the NYSE Euronext family is highly beneficial for our customers and shareholders, and demonstrates our ongoing commitment to growing our business and product lines,” said Duncan Niederauer, NYSE Euronext CEO. “NYSE Euronext is the established leader in global financial-market consolidation, offering the most attractive and
diverse array of products of any global exchange. This transaction is consistent with our strategic objectives and will strengthen our competitive position in the US, produce significant operational efficiencies, and create new business opportunities.”

Neal Wolkoff, chairman and CEO of the American Stock Exchange, said, “The Amex is pleased to join NYSE Euronext and be part of the world’s leading multi-asset global exchange. With the Amex’s diverse business lines and specialization in launching innovative new products, I am excited to be at the helm of the Amex as we complete this compelling and strategic business combination.”