Exchanges M&A Pro Lown Sticks to His Guns in a Tough Sector

Co-head of global financial technology at Morgan Stanley in New York, Christian Lown advised IntercontinentalExchange on its announced $8.2 billion bid for NYSE Euronext. Lown is a veteran deal maker for the exchange industry, which has seen several high-profile merger bids fail in recent years.


CHRISTIAN LOWN ARRIVED IN HONG KONG IN 1993 as a newly minted graduate of Virginia’s Lynchburg College, where he had studied international relations with a minor in history. The New Jersey native spent a year teaching English and American history to 40 Hong Kong students and learned to “adjust his prejudices at the door” as he worked with people from different cultures.

Lown (pronounced “loan”) soon left teaching for a career in investment banking, but the experience served him well. The 43-year-old banker, who is co-head of global financial technology at Morgan Stanley in New York, knows that cultural and legal differences can have a crucial impact on merger activity in the increasingly global exchange sector.


That knowledge has informed his work as lead adviser to longtime client IntercontinentalExchange on its $8.2 billion agreement to acquire NYSE Euronext. If the deal closes, it will end a saga for Atlanta-based ICE and its target, operator of the New York Stock Exchange and Amsterdam-based Euronext. Both firms have been trying to merge with various partners for several years, and Lown has advised on many of those deals.

Lown ascribes the exchange industry’s M&A woes to regulatory and antitrust hurdles. Scuttled deals include Deutsche Börse’s $9 billion attempted takeover of NYSE Euronext last year and Singapore Exchange’s $8 billion bid for the Australian Securities Exchange in 2011. To keep the pipeline full, Lown has looked elsewhere. “While deal activity stalled in the exchange sector in 2010 and 2011, we were still busy advising on other acquisitions in the broader financial technology sector,” he says. Lown represented New York–based index provider MSCI on its $1.6 billion purchase of New York’s RiskMetrics Group in 2010. Last year Morgan Stanley remained in fourth place globally for financial institutions group M&A as its volume rose 44 percent, to $56 billion, according to Dealogic.

Lown got his start as an assistant equity analyst with Hong Kong–based brokerage CLSA Asia-Pacific Markets in 1994, just when China was beginning to liberalize its equity markets. When the Asian financial crisis erupted three years later, he returned to the U.S., earning an MBA from the University of Virginia’s Darden School of Business. Lown joined Credit Suisse First Boston as an associate in 2001, and he has been based in New York ever since. In 2003 he moved to UBS, where he was promoted to vice president before Morgan Stanley hired him as an executive director in 2006.

That year he worked with ICE on its $10 billion offer for the Chicago Board of Trade, which was trumped by CME Group’s $11 billion bid. “Even after ICE’s very public failure to acquire the CBOT, Chris stayed with us as we moved on and shifted our sights to other ideas,” says ICE chairman and CEO Jeffrey Sprecher.

ICE is offering $33.12 per share in stock and cash for NYSE Euronext in a deal that would create one of the world’s biggest derivatives exchanges. Success isn’t guaranteed, though: After Deutsche Börse made its bid for NYSE Euronext, ICE teamed up with New York–based Nasdaq OMX Group to make a counteroffer, only to have regulators on both sides of the Atlantic block the two bids on competition grounds by early 2012.

Undeterred, ICE revived merger talks with NYSE Euronext last September. The following month the U.S. firm offered to spin off Euronext, the group’s European exchange subsidiary, to appease the Continent’s antitrust regulators. After NYSE Euronext rejected its first bid, which was 90 percent stock, ICE upped the cash portion of its offer to $11.27 a share. “There was a lot of price discovery,” Lown says.

The deal maker expects a pickup in FIG M&A activity as economies recover and financial institutions in China and other emerging countries seek more exposure to developed markets; he cites Industrial and Commercial Bank of China’s 2012 co-purchase of a U.S. subsidiary of Bank of East Asia. Of China, Lown says, “The opportunity has never been better.”