Merger of Deutsche Börse and NYSE: Whence the relative valuation of the two?

[Schnitte]

Deutsche Börse, which operates the Frankfurt stock exchange, and NYSE Euronext, which operates the New York Stock Exchange plus a couple of smaller bourses in Europe, are having talks about a possible merger (again). This would create the largest stock exchange operator in the world.

What I don’t quite get here is the part according to which Deutsche Börse shareholders would end up getting 60 % of the new company, with the remaining 40 % going to the NYSE Euronext shareholders.

Why is that so? Surely the Frankfurt, even though it’s the largest market in continental Europe, is much smaller in volume than Wall Street, and that is not even considering the other European markets run by NYSE Euronext. I understand that the market transaction volume on a stock exchange is not the same thing as the market value of the company running the exchange; but since companies like these mainly create revenue from commission fees on transactions, there should be a strong correlation between the two. I would expect Deutsche Börse to be the junior partner in such a deal.

I understand nobody here has access to details about the valuation of the two in the merger (and if somebody had, they would certainly not share it here), but there must be some flaw in my logic and an explanation why Frankfurt is the major partner in this deal even though its market is smaller.

[constanze]

@Schnitte

What I don’t quite get here is the part according to which Deutsche Börse shareholders would end up getting 60 % of the new company, with the remaining 40 % going to the NYSE Euronext shareholders.

Why is that so? Surely the Frankfurt, even though it’s the largest market in continental Europe, is much smaller in volume than Wall Street, and that is not even considering the other European markets run by NYSE Euronext. I understand that the market transaction volume on a stock exchange is not the same thing as the market value of the company running the exchange; but since companies like these mainly create revenue from commission fees on transactions, there should be a strong correlation between the two. I would expect Deutsche Börse to be the junior partner in such a deal.

The German wikiabout the Deutsche Börse lists (besides the older merger attempts) this information

An der fusionierten Börse würden die Anteilseigner der Deutschen Börse die Mehrheit halten, die Marktkapitalisierung der Deutschen Börse beträgt zur Zeit 11,4 Mrd. Euro, die der NYSE Euronext 6,7 Mrd. Euro.[17]
On the merged Stock Exchange, the shareholders of Deutsche Börse would hold the majority; the market capitalisation* of Deutsche Börse is at the moment 11.4 Millard** Euro, of the NYSE 6.7 Millard Euro.

• Not just the course of the stock, but a specific term for that subject.
  ** 1 continental Milliarde = 10 to 9th power (a thousand millions); I try to avoid using billions because a continental billion = 10 to 12 power, or a thousand milliards, causing all kinds of mistranslation in media when done casually).