NYSE Euronext Chief Executive Duncan Niederauer sees a 10 percent to 20 percent chance that his $9 billion merger with Deutsche Boerse will be approved, but the low odds do not mean he is giving up hope yet.

Niederauer has spent the last few days meeting European antitrust commissioners and policy makers in Davos, Switzerland, to make a case for why the deal should be allowed to go through.

I am still hopeful, but if you are realistic, history tells you it's a 10 to 20 percent chance, Niederauer said in an interview. I don't think it is dead, and I think it is more alive than it was three days ago.

Concerned about the combined entity's share of more than 90 percent of the listed derivatives market in Europe, EU Competition Commissioner Joaquin Almunia plans to recommend that the so-called college of commissioners block the deal when the meet on February 1.

A source familiar with the matter told Reuters on Tuesday that the European Commission was expected to follow Almunia's recommendation. Almunia presented a 459-page document laying out his case to the other 26 commissioners last Friday.

Almunia had asked for Deutsche Boerse to sell its Eurex derivatives arm, or for NYSE Euronext to offload its London-based futures exchange Liffe. But the exchange operators refused.

They have argued that the market for derivatives is global, not just European, and antitrust regulators should have also included the over-the-counter derivatives market when looking at the impact of the deal.

Niederauer said their argument was getting some traction with the officials he had met at Davos.

We are trying to meet with some of the other commissioners and policy-makers because we believe that is a contrived market definition, that is designed to make the denominator as small as possible and we fundamentally disagree and we are finding a number of other people who do too, he said. That's where we stand right now.

And I think what's resonating with the commissioners is that it's completely contradictory to what the commission has said clearly in statements that they have put out in the last few years, he said. So we are getting some sympathy. Is that enough to turn the tide? I don't know. I guess we will know February 1.

Niederauer also said should the deal not go through, NYSE plans to revert to its standalone strategy and reveal details as soon as its next earnings call on February 10.

That will include continued focus on the derivatives and technologies businesses. He also said the company plans to say at the time what its capital management approach would be should as a standalone company.

(Reporting By Paritosh Bansal; Editing by Gary Hill)

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