EURONEXT, the pan-European exchange, and the New York Stock Exchange (NYSE) are to unveil an all-share merger that will create the world’s first transatlantic bourse, with a combined value of more than $20 billion.

Advisers and executives representing both companies are this weekend agreeing the final details of the deal. The intention is to put it to the Euronext board tomorrow, ahead of the group’s annual meeting in Amsterdam on Tuesday.

The plan is to have the shares of the combined company trading in Paris and New York.

Both Euronext and the NYSE have in the past been in talks to do a deal with the London Stock Exchange, but have since decided the best option is to press on with their own merger.

The deal would create the world’s biggest trading platform with a vast pool of transatlantic liquidity. The removal of the NYSE from the long-running game of global consolidation would open the way for rival Nasdaq to pursue the London Stock Exchange unchallenged.

It is thought the merger of Euronext and NYSE will result in one top management board based in New York, and the two exchanges are likely to remain separately regulated entities. John Thain and Jean-François Théodore will hold top positions on the combined board.

The Euronext board is bracing itself for a fierce showdown with some of its biggest shareholders, who plan to use the annual meeting to push through a resolution for the company to merge with its rival Deutsche Börse.

On Friday Deutsche Börse submitted a formal merger proposal to Euronext and said its offer was “the most attractive consolidation option for customers, shareholders, employees and for the financial centres involved”. However, the terms of the Deutsche Börse bid are unacceptable to Théodore. The German exchange has said the combined company must be based in Frankfurt and it would hold the positions of chairman and chief executive.

A group of hedge funds, led by The Children’s Investment Trust, claim that their voting weight will be enough to ensure a tie-up with Deutsche Börse. One dismissed any other option as “pure fantasy”.

But members of Euronext management, who have over the past week employed a lobbying firm to persuade investors not to vote for a merger with the Germans, are confident they have won enough support to outgun the hedge funds.

Last week, David Slager of Atticus, one of the hedge funds that was most supportive of a deal with Deutsche Börse, said he would be just as happy with a Euronext-NYSE tie-up if it happened quickly.

Over the past few months, the flirtations between all global exchanges have reached fever pitch. As well as Deutsche Börse, Euronext has been targeted by other bourses, including the LSE, the Chicago Mercantile Exchange and the owners of the Dubai stock exchange. The NYSE was said to favour the LSE, too, but has been attracted by Euronext’s strength in derivatives through Liffe and its established reach across Europe.

Shares in Deutsche Börse and Euronext closed on Friday 3.24% and 5.37% higher, at €110.74 and €74.60 respectively.

In yet another twist on Friday, Borsa Italiana joined the fray and announced that Euronext was its first choice for a future international alliance. Euronext said that it welcomed the idea.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive