A comparative study on merger amongst stock exchanges- Deutsche BÖrse and Nyse euronext

The current pace of globalization and technological advancement has placed a huge onus on stock

exchanges in determining a viable strategy capable of creating a competitive advantage and sustaining

profitability. The recent trend of mergers amongst stocks exchanges either local or cross-border indicates

the potential that merger strategies possess in creating the desired competitive advantage and providing

sustainable profitability level. But the degree to which a merger has a positive impact on merging firms

remains unknown.

This study examines the impact of the Deutsche Börse-NYSE Euronext merger announcement on the

returns and volatility of listed companies stock in both the Deutsche Börse and the NYSE Euronext. In

specific terms, it investigates the class of listed companies in terms of market capitalisation that benefited

from the merger announcement. The results from this study show that the Deutsche Börse-NYSE Euronext

merger announcement had an insignificant impact on both the returns and volatility of stocks listed on both

exchanges. Notwithstanding this observation, the findings of a post-merger analysis regarding the merger

would justify the rationale for undertaking the merger strategy by both exchanges.