Stock Exchange Mergers: The Real Story

Stock exchange mergers are all the rage these days. The NYSE Euronext Group (NYSE: NYX ) and Deutsche Boerse AG are attempting to merge and the London Stock Exchange Group PLC and TMX Group Inc. are also getting together. The deals are the latest in a consolidation cycle among exchange operators that has accelerated over the past decade. In 2010, Singapore Exchange Ltd. (PINK: SPXCY ) agreed to an $8.3 billion takeover of Australia's ASX Ltd (PINK: ASXF ) to create Asia's fourth-largest stock exchange. And IntercontinentalExchange Inc. (NYSE: ICE ) purchased the Britain-based Climate Exchange PLC (PINK: CXCHY ) that same year for $597 million. So I would not be at all surprised to see other bourses follow up with stock exchange mergers of their own. CME Group Inc. (Nasdaq: CME ) and Nasdaq OMX Group Inc. (Nasdaq: NDAQ ) still haven't ruled out a potential counteroffer for NYSE. And some analysts speculate that the Nasdaq could be the first U.S. stock exchange to tie-up with an Asian partner. Indeed, for the exchanges themselves, there appear unlimited possibilities of expansion, mostly in the derivatives market. But the sad truth is that the only thing individual investors are likely to get out of all of this activity is a sneaky increase in fees. <a href="" target="_blank">To find out why exchange mergers won't benefit investors, read on...