Could Europe’s loss be America’s gain? Big name companies across the pond have raised eyebrows by choosing New York-based stock exchanges rather than European counterparts.
British chip maker Arm, Ltd filed with regulators confidentially for a U.S. stock market listing, according to Reuters. In addition, Ascential Plc, the London-listed data and analytics company, said earlier this year it would spin-off its world-wide digital commerce assets into an independent, publicly traded company listed in the U.S. Other companies have decided to make the U.S. their primary listing including construction company CRH, which will leave the FTSE 100; and German industrial gas company Linde, which is abandoning its dual listing and choosing the NYSE over the DAX.
Are these companies on to something?
There’s no doubt that a stateside listing has certain advantages. Compared with other regions, the U.S. represents a larger pool of capital and investors, offering greater liquidity and potentially higher valuations.
In addition, as regulatory burdens grow, dual listings are becoming more arduous, leading companies to leave weaker and disjointed exchanges. Foreign companies are also eager for inclusion in U.S. equity indexes.
Brexit has played a part as well. The European financial centers of London, Amsterdam, Frankfurt, and Paris are much more likely to view each other as rivals since the U.K. withdrew from the European Union. The U.S. tends to benefit when overseas exchanges compete rather than collaborate with each other.
Finally, U.S. leadership in certain industries — technology, for example — makes listing here attractive to foreign companies in those sectors.
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America is the land of opportunity, including in public listings. To learn more, contact DFIN.