THE New York Stock Exchange last night signed a $20 billion (£10.7 billion) merger agreement with Euronext, the amalgam of European bourses, in an historic deal to create the world’s biggest stock exchange. The exchanges will unveil NYSE Euronext, the world’s first transatlantic stock exchange, at a ceremony in Paris this afternoon.

The location was chosen as part of a public relations effort insisted upon by the Europeans to prove that the deal is a merger of equals and not a takeover by New York.

John Thain, NYSE chief executive, will become chief executive of the proposed combine, the headquarters of which will be on Wall Street, while Jan Michiel Hessels, Euronext’s supervisory board chairman, will be chairman.

A Euronext spokesman said that the deal left the door open for one of its directors to become chief executive of the combine once Mr Thain retires. “The balance of the executive will be maintained,” he said.

Under the terms of the agreement, each share of NYSE will be converted into one share of NYSE Euronext. Euronext shareholders will be offered the right to exchange each of their shares for 0.980 shares of NYSE Euronext stock and €21.32 in cash.

The two companies expect annual cost savings of $375 million. NYSE and Euronext shareholders must still vote on the merger, however, and some big US investors are opposed.

A Canadian fund manager which owns 4.3 million NYSE Group shares, last night told The Times that the international nature of the deal might fall foul of politicians worried by foreign takeovers of key US businesses.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts