The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Exchanges: Nasdaq’s bid may cut costs, but not for LSE users

The London Stock Exchange’s shareholders clearly have a lot to gain from Nasdaq’s bid for the market, especially if, as is widely expected, the New York Stock Exchange joins in the fray and pushes up the price even further. But what, if anything, users stand to gain is far from clear.

Nasdaq’s 950p-per-share bid is almost twice the 580p per share that Australian bank Macquarie was willing to pay. The price, analysts say, can be justified by the large cost savings that Nasdaq could extract from technology synergies and staff cuts. The potential for cost savings is so great that analysts estimate that Nasdaq could afford to pay as much as 1,200p to 1,650p a share for the London exchange and still have an earnings-accretive deal.

The NYSE, it is thought, could make similarly massive savings.

Even if such savings could be realized, market users would be unlikely to see much of it filtering down to them as lower trading costs.

This is because a transatlantic exchange merger would do nothing to increase competition in the trading of LSE-listed securities. A combined Nasdaq-LSE or NYSE-LSE exchange company would have no more incentive to lower trading costs in London than the LSE does at present.

Any serious potential for reducing trading costs for users, through, for example, a common clearing and settlement arrangement, is impossible in any transatlantic deal because neither the LSE nor any of its New York suitors owns a clearing house and because London’s stocks are priced in pounds whereas Nasdaq’s and the NYSE’s are priced in US dollars.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree