Global Stock Exchanges Are Headed for Major Consolidation

Together, Deutsche Boerse and NYSE Euronext would dominate exchange trading in continental Europe. The companies said they could cut costs by 300 million euros ($408.7 million) a year.

The combined group would have headquarters in New York and Frankfurt, with Deutsche Boerse shareholders holding about 60 percent of the combined company and NYSE shareholders holding the rest. The companies disclosed their talks on Wednesday.

"I think these consolidations are the wave of the future—with aspects we haven't even seen yet—once the derivatives markets are required to be more like exchanges," former SEC Chairman Harvey Pitt told CNBC. "Securities regulators should welcome these consolidations, but competition regulators may be concerned."

Not everyone was so enthused about it, however.

"I think it's a big yawn," Ken Langone, co-founder of Home Depot and a former NYSE director, told CNBC. "The listed exchanges are losing market share dramatically. They're less relevant with electronic trading that's now prevalent throughout the industry. It seems to me that the only sense for the merger here is to cut costs."

Earlier in the day, LSE said it would buy TMX, forming the world's fourth-largest exchange and a top centre for trading mining and energy shares, with $4.1 trillion of stock changing hands a year.

The exchanges are looking to regain market share lost to upstart electronic trading platforms. Other exchanges could face similar pressure to merge, analysts said.