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Monday, 20 March, 2000, 13:43 GMT
European markets merge
Options traders in Amsterdam
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Brussels, Amsterdam and Paris stock exchanges have announced plans to merge.

The new market will be called Euronext and will be Europe's second largest in size after the London Stock Exchange.



Euronext will continue to pursue the goal of a pan-European trading infrastructure

Euronext
The move, officially announced on Monday afternoon in London, increases pressure on stalled plans for a pan-European alliance of eight exchanges.

At a news conference the three bourses insisted that they intended their scheme to be part of the framework for the broader alliance.

Euronext should be in operation in September and is expected to be floated on the stock market by the end of the year, they said.

Cultural and technical hitches

What is described as the first merger of independent national exchanges would have more than 1,300 domestic-listed companies, with a total market capitalisation of 2,380bn euros (1.47bn).

Referring to separate plans for a wider eight-member pan-European alliance, the statement said that Euronext would "continue to pursue the goal of a pan-European trading infrastructure and to maintain the current alliances that each of the former exchanges has in place with other parties".

Representatives of the eight European stock exchanges - which also include Frankfurt, London, Madrid, Milan and Zurich - are to meet in Brussels on Wednesday.

They had hoped to form a unified European exchange by the end of this year, but plans have been slowed down by cultural and technical wrangles.

The London Stock Exchange said: "We welcome the move which we see as the beginning of a period of consolidation throughout Europe and, possibly, internationally."

Last week, the London exchange voted to abandon its mutual status and become a public limited company, which analysts said would make it easier for the London market to link up with other stock exchanges.

Expansion plans

In the meantime Euronext is already considering expansion, with Belgian Finance Minister Didier Reynders naming Luxembourg and Madrid as the most likely bourses to join next.

Despite the disagreements hindering the pan-European market's creation, the exchanges all know they face a growing threat from electronically-based rivals.

Geographically-based exchanges were important when shares were bought and sold in person on trading floors, but many firms' shares are now listed in more than one country.

Merger logic

The launch of the single European currency across much of mainland Europe also added to the logic for the market mergers.

Paris is Europe's second-largest bourse, as measured by the market capitalisation of domestic companies listed there. Amsterdam is fifth and Brussels is 10th.

The merged company would be home to half of the euro-zone's top 50 companies, as measured by market capitalisation, and 20 of Europe's top 60 companies.

A spokeswoman for the Paris bourse said that Euronext was continuing to talk with the five other exchanges involved in the eight-strong alliance.

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See also:

23 Sep 99 | The Economy
Europe's exchanges increase links
15 Mar 00 | Business
Stock exchange votes to go public
06 Dec 99 | Business
German exchange to demutualise
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