Stock market operator NYSE Euronext Inc. said today that it is in “advanced discussions” about a possible merger with Germany’s Deutsche Boerse AG, which runs the Frankfurt stock exchange.

A possible all-stock deal would create the world’s largest exchange operator by revenues and profits, NYSE Euronext said. The new entity would have headquarters in New York and Frankfurt.

NYSE Euronext operates the New York Stock Exchange and markets in Amsterdam, Brussels, Lisbon and Paris as well as the NYSE LIFFE derivatives market. Company officials said it expected the two market operators to combine their businesses under a new legal entity incorporated in the Netherlands. Deutsche Boerse shareholders would hold some 59 to 60 percent of the combined equity, with NYSE Euronext shareholders holding the remainder.

In New York, investors cheered the announcement in midday trading, sending NYSE Euronext’s shares up by 14 percent to $38.

The company cautioned, however, that no agreement has been reached and there could not be any assurance that a deal would eventually be done.

Deutsche Boerse AG CEO Reto Francioni would become the new group’s chairman, and NYSE CEO Duncan Niederauer, based in New York, its CEO, Wednesday’s statement said. The new company’s executive committee would be drawn equally from the current leadership of both companies, it added.