Ad-hoc | 19 May 2006 14:05

Deutsche Börse AG:Deutsche Börse details proposal for potential Euronext merger

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Deutsche Börse AG (Deutsche Börse) presents its views on a potential combination between Deutsche Börse and Euronext. Deutsche Börse sees the following advantages of a combination of Euronext and Deutsche Börse: – A combination of the two companies would create a truly pan-European exchange organization; – The integration and harmonization of the trading infrastructure of Deutsche Börse and Euronext would result in significant efficiency gains for the customers of the combined entities; – The combination holds the potential for additional growth, significant cost syner-gies as well as an optimised capital structure. Deutsche Börse expects synergies clearly in excess of synergies announced for any other stock exchange combina-tion discussed to date; – A combination of Euronext and Deutsche Börse would be a significant step for-ward in the integration of European financial markets, would form the logical partner for other European exchanges and would have the ability to compete on a global scale. Deutsche Börse proposes to base a combination of the two groups on the principle of a merger of partners. In light of this principle, Deutsche Börse envisages the following key terms for a potential combination with Euronext: 1. A new parent company, domiciled in the Netherlands, should act as a holding company for both groups. Neither Euronext N.V. nor Deutsche Börse AG shall be the absorbing entity to combine the two groups. A new corporate brand and branding strategy would be developed for the merged entity. 2. Deutsche Börse expects that the business model of the combined entities will of-fer significant room to increase capital efficiency and therefore distribute free cash to shareholders during or shortly after the merger. The objective would be to include all Deutsche Börse and Euronext businesses into the new group, including Deutsche Börse’s post trading activities. However, the business model shall respect local regulations and particularities of the re-spective market places. There is no intent to change market infrastructures in markets like France. Deutsche Börse is prepared to contribute its cash equity clearing to a truly European cash equity clearing organisation operated as an in-dependent, privately run service provider. Deutsche Börse shares Euronext’s vision of managing the IT organisation in close co-operation with an external partner. 3. In order to emphasize the European character of such a merged entity the legal domicile of the new group shall be Amsterdam. The new group would have prin-cipal listings for its shares in Paris and Frankfurt. National stock exchanges shall be operated out of local legal entities. For the overall location strategy a pan-European structure across financial centers is proposed. – Headquarters will be located in Frankfurt, which would include the majority of executive management’s offices and of key staff in orporate center functions. – Cash equity trading and listings activities will be led from Paris and will continue to be operated by the local stock exchange organisations which would be fully in line with the current model of Euronext. Paris would also become Center of Management for Pan-European Cash Trading Initiatives like a pan-European equity market for growth companies to be developed. – Derivatives trading will be operated and located in Frankfurt and London (Liffe). – Information Services will be managed from Amsterdam. – Clearstream will continue to be managed from Luxembourg. – IT operations will be managed from Frankfurt. 4. The new combined group shall have a two tier board structure. An equal composition of the Executive Board in terms of numbers is proposed between Euronext and Deutsche Börse Management. Initially, the Management Board of the combined group shall be led by Jean-Francois Theodore and Reto Francioni becoming Co-CEOs. After a transition period Reto Francioni will become sole CEO and Jean-Francois Theodore would join the supervisory board in a leading role in order to further contribute his experience. The Supervisory Board of the merged entity shall reflect outstanding international business expertise with a balance of 8:8 members from each company with a casting vote for the Chairman. The Chairman shall be nominated by Deutsche Börse, and a Vice Chairman shall be nominated by Euronext. The chairs of the Board Committees shall also be divided up amongst Board members of both sides. Contact: Walter Allwicher/Alexandra Güntzer Tel.: +49-69-21 11 15 00 (c)DGAP 19.05.2006 ————————————————————————— Language: English Issuer: Deutsche Börse AG Neue Börsenstraße 1 60487 Frankfurt am Main Deutschland Phone: +49 (0)69 211 – 0 Fax: +49 (0)69 211 – 1 20 0 email: info@deutsche-boerse.com WWW: www.deutsche-boerse.com ISIN: DE0005810055 WKN: 581005 indices: DAX Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-Bremen, Hannover, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service —————————————————————————