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Across the globe, stock exchanges are scrambling to bulk up their operations. This means shelling out billions and billions for acquisitions.The latest deal: Deutsche Boerse AG wants to pay $2.8 billion for the International Securities Exchange Holdings, Inc. (NYSE: ISE).
The ISE holds the second largest options market in the U.S. What's more, it has a very sophisticated electronic platform, which, no doubt, is a critical asset. Also, the options business is high margin.
As for Deutsche Boerse, it has the Frankfurt stock exchange and a nice business in derivatives.
All in all, it's a pretty good fit and should help blunt the competition from Nasdaq and the NYSE Euronext, Inc. (NYSE: NYX).
The bid is at $67.50, a juicy premium of over 40% -- some return in a single day.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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