A top U.S. lawmaker Sunday said he was told that the management team at NYSE Euronext, which is in talks to be acquired by larger rival Deutsche Boerse, will run the exchanges company if they merge.
But within hours, U.S. Senator Charles Schumer, a top Democrat and member of the Senate Banking Committee, had at least partially backtracked on the comments in a sign of the sensitivity over who will control the combined entity.
Schumer on Sunday morning told reporters he met with NYSE Euronext Chief Executive Duncan Niederauer on Friday and again on Saturday.
Initially he said he was told the deal "will give managerial control of the new operation to the team from NYSE, with Mr. Niederauer installed as the new CEO."
The comments could lead to questions in Germany where the deal is being sold as a German takeover of the NYSE or as a merger of equals. Any suggestion that the NYSE management team will be in control counters that public stance and could create an obstacle to the deal getting done.
Schumer's spokesman Brian Fallon later emailed Reuters to say that Schumer had not meant to communicate "greater knowledge of the arrangement beyond Niederauer as CEO."
Deutsche Boerse declined to comment on the remarks.
Bob Rendine, senior vice president for NYSE Euronext's global communications, declined to comment on the issue of management.
"We certainly have a lot of respect for Sen. Schumer. We're delighted that he is engaged with us on this issue," Rendine said. "We look forward to continuing keeping him up to speed on our progress, and on the potential benefits for New York and New York City."
NAME IS CRITICAL
The lawmaker emphasized that the name of the combined company -- and whether NYSE's name came before that of Deutsche Boerse -- was a "critical factor" in whether the proposed deal would win his support.
He says "NYSE" must have first billing for business and branding reasons, but also to reassure him that the combination is a true merger of equals.
"Some may say 'What's in a name?' but I say, 'A lot,' he said. "The New York Stock Exchange is a symbol of national prestige, and its brand must not suffer under this merger."
The New York Stock Exchange occupies a central role in America, Schumer said, its opening bell not unlike schoolchildren reciting the Pledge of Allegiance. For "the Germans" to place the NYSE name second calls into question whether the deal is a merger or a takeover.
"The name of the new company will be a critical factor in determining support for this merger, both in the regulatory review process as well as in the court of public opinion," Schumer said. "It should be resolved sooner rather than later."
The two companies on Saturday issued a joint statement insisting a name for the combined holding company has not yet been chosen. Two people close to the negotiations, though, told Reuters that a single company may be called "DB NYSE Group."
Frankfurt-based Deutsche Boerse last week announced the talks to acquire NYSE Euronext. The larger German company would have a 60 percent stake in the combined company, but Niederauer is to be named chief executive. For details on the deal talks, see [ID:nN11287592]
Schumer on Sunday morning said he took comfort knowing NYSE and Deutsche Boerse would be equally represented on the company's board and that job losses in New York would be minimal.
Schumer's spokesman later also amended that comment, and said the lawmaker was referring to the company's "management committee" and not the board of directors.
Schumer said he will "reserve final judgment" on whether to support the deal until an agreement is announced by the two exchange companies.
FIRST U.S. PROTEST
Until now, the proposed sale of a 218-year-old symbol of American capitalism has drawn little protest from U.S. officials.
New York Mayor Mike Bloomberg and U.S. Representative Carolyn Maloney of Manhattan said they were supportive, arguing it is better that the NYSE be part of what would be the world's largest exchanges company.
French Ecomy Minister Christine Lagarde, though, last week said she was concerned about the deal's impact on the security and stability of financial markets.
She wants to see Paris, formerly home of Euronext, play a key role in the combined company.
Euronext was an operator of exchanges across Europe that was acquired by the New York Stock Exchange in 2006.
Along with Lagarde's comments, Schumer raising questions of how the merger will be implemented could throw a wrench into what is already a complex transaction spanning a number of countries, regulatory bodies and markets.
"I intend to consider any potential deal from the same perspective that I always use: will it keep New York on top as the financial center of the world?" Schumer said.
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