Merger of Exchanges to create the countrys 10th largest company
Folha de S. Paulo - 02/21/2008
The merger of the Bovespa Holding with the Futures and Commodities Exchange (BM&F), seen as one of the greatest deals of the market in 2008, would create the country's 10th biggest company in market value. Taking into account the closing prices of their stocks yesterday, both the companies are worth approximately R$ 35.25 billion (US$ 20 billion). As a result, the "super-Exchange" would be ahead of companies such as Gerdau, CPFL Energia, Vivo, and Embraer. The integration of the activities of the both Exchanges would reduce their costs and increase their strength to acquire participation in other companies. Analysts also comment the expectation that the new Exchange go out hunting, in the future, for opportunities to enter other Latin American markets. The fact of the controllers practically being the same (stock brokers and banks) facilitates the negotiation. Both Exchanges may also implement a large clearing house, with the possibility of providing support to businesses of other markets, such as the exchange market.