NYSE Deal Bears Big Breakup Fee

The Wall Street Journal’s Jacob Bunge and Charles Forelle report that the tie-up agreement between NYSE Euronext and Deutsche Börse AG would cost

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a rival bidder $337 million to break up, according to documents filed with regulators Wednesday.

NYSE Euronext and Deutsche Börse each agreed to pay the other party a €250 million ($337 million) termination fee should the deal be spoiled. That is equal to about 3.4% of the deal’s value of $10 billion when it was announced Tuesday. Analysts said the breakup fee is on the high side.

“By putting something like this in, you’re trying to make sure it’s too expensive for anybody else to step in,” said Brad Hintz, an analyst at Sanford Bernstein.

In a securities filing Wednesday, NYSE Euronext disclosed additional details on how the combined company would operate.

In a sign of how carefully executives are trying to balance the interests of shareholders, regulators and political leaders in the U.S. and Europe, the company said its management committee would meet “alternately in Frankfurt and New York.”

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