CREDIT SUISSE: A merger between 2 stock market behemoths makes a lot of sense (NDAQ, LSE)

The London Stock Exchange's search for a buyer hit a walllast month when the European Commission put the kibosh on a merger between the London Stock Exchange and Germany-based DeutscheBrse.Other exchanges, such asthe Chicago Mercantile Exchange and the International Continental Exchange, the parent company of the New York Stock Exchange, have reportedly flirted with the idea of buying LSE.But arecent note penned by equity research analysts at Credit Suisse, which explored the "strategic and financial merits" of 14 merger scenarios between various exchanges, saysthat a merger betweenNasdaq and the London Stock Exchange would make the most sense."Acombination would create a business services powerhouse that is levered to many secular growth trends (indexing, market data and technology) with significant cross selling opportunities (corporate solutions, IT services)," the bank said.With a market cap of $11.46 billion, Nasdaq is the thirdlargest exchange in the United States, behind the Intercontinental Exchange ($35 billion), and the Chicago Mercantile Exchange ($39 billion).The London Stock Exchange has a market cap of $14.4 billion.According to Credit Suisse, the merger could potentiallyboost Nasdaq's "fast growing" index business, and combine two of the most well-know "listing venues for global corporate and ETF listing and trading."Credit Suisse says the deal would have a total value of $17 billion (implying a value of38 per London Stock Exchangeshare, or about $47.50 per share), a 20% premium to current prices.Such adeal would give Nasdaq an even greater foothold on the European continent. The firm purchased the Nordic stock market OMX in 2007 for $3.7 billion, which opened it up toequity and derivative businessesin Sweden, Denmark, Iceland, Finland and the Baltics.A spokesperson from Nasdaq declined to comment.Join the conversation about this storyNOW WATCH: Robert Shiller on what a rate hike will do to asset prices and who Trump shouldn't put in charge of the fed
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