Merger Brings Joy to Archipelago

    April 22, 2005

The New York Stock Exchange (NYSE) is merging with the Archipelago Exchange (ArcaEx) to become NYSE Group, Inc. which will be publicly held.

“This combination will be good for investors and for America. It will create a strong, dynamic and innovative enterprise capable of meeting the demands of investors and issuers throughout the world in the decades ahead,” said John A. Thain, CEO of the NYSE. “As we look to the future and to the challenge of competing globally in a high-speed electronically connected world, it is clear that we must do more. This transaction will mean we will be more diversified and transparent, and better able to compete, grow and serve our customers.

Archipelago chairman Gerald Putnam is happier than a pig in slop about the merger.

According to a Chicago Sun Times article,

“He basked in investor approval of his company’s planned merger with the New York Stock Exchange. He runs the ArcaEx electronic market and shares of the company rocketed higher by $11.20 to close at $29.96 in their first session after the announcement.

The gain made Putnam’s personal stake in Archipelago worth an estimated $36 million, some $16 million more than before the merger. Following approval by regulators and NYSE members, Putnam, 46, would become president and co-chief operating officer of the new NYSE Holdings Inc.”

The merger will represent the largest-ever among securities exchanges and combine the world’s leading equities market with the most successful totally open, fully electronic exchange, creating long-term shareholder value.

“We are thrilled to join forces with the New York Stock Exchange to create a truly world-class securities marketplace,” said Jerry Putnam, CEO of Archipelago. “This combination benefits investors by providing a stronger and broader platform for trading and strengthens our abilities to expand into new products and services. It will also benefit the U.S. capital markets, as NYSE Group, Inc. becomes a leading player in global markets. And we believe this merger creates Archipelago shareholder value through expense synergies and revenue growth opportunities.”

The transaction is subject to approval by members of the NYSE and shareholders of Archipelago as well as certain government approvals, including the Securities and Exchange Commission and the expiration of the applicable Hart-Scott-Rodino waiting period.

The merger is expected to close in either the fourth quarter of 2005 or the first quarter of 2006.

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