NYSE and ArcaEx To Become NYSE Group, Inc.

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The New York Stock Exchange (NYSE) has entered a merger agreement with the Archipelago Exchange (ArcaEx) which will lead to the combined entity, NYSE Group, Inc., becoming a publicly-held company.

“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.

If approved by regulators, NYSE members and Archipelago shareholders, 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.

“It will also enhance the depth and resilience of America’s capital marketplace by bringing together the strength of NYSE’s auction market and the speed and entrepreneurialism of Archipelago. Today, publicly held exchanges such as those in London, Frankfurt, Toronto and Sydney are aggressively competing to expand their reach and share of market in the new global arena. On behalf of the NYSE board of directors, board of executives and my colleagues, we look forward to working with the Archipelago team to strengthen our position as a world-class competitor and to provide the highest levels of market quality and service to our customers.”

“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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