Thursday, June 15, 2006

Don't count your chickens until they are hatched

You know the sayings: "Don''t count your chickens until they are hatched" and "it's not over until the fat lady sings." Well, it now appears the NYSE may give us yet another example of why it is wise to remember the end is not the end until it is over.

From today's NY Times DealBook:
"A trans-Atlantic deal that looked like a strategic coup for the newly public NYSE Group — its proposed acquisition of the pan-European stock exchange Euronext — appears to be turning into a quagmire. "
Why? It became political:
"The NYSE Group's traction has slipped as politicians in Europe have lined up in favor of a domestic alternative to the deal. The opposition reflects fears among European companies that they might be subject to American securities regulations if the acquisition is completed."
This despite public assurances by US politicians that regulations would be left in European hands.

Two lessons:
  1. It's not over until it's over.
  2. If in a takeover, you can make it political, you have a legitimate shot at blocking the deal.

1 comment:

Anonymous said...

The whole deal has been political from the first minute when Euronext management announced that Deutsche Boerse would have to sell Clearstream to become a potential partner.
The French only have one goal: to lose as little national influence as possible and that's why they are also trying to get Borsa Italiana before the deal closes. Would give them more European weight in the joint group.
Lessons learnt from past French deals:

- Nothing goes in France without political influence
- Try to become an investment banker in Germany or the UK, it's much more fun than France ;-)