The Nasdaq stock market was yesterday poised to complete the purchase of the Instinet electronic marketplace and brokerage unit of Reuters for about $1.8bn, according to people familiar with the matter.

The deal, which could be announced today, would see the second-largest US stock market become a bigger threat to the New York Stock Exchange by buying back order flow it lost in the late 1990s with the rise of electronic communications networks (ECNs) such as the Inet unit of Instinet.

People familiar with the matter said Reuters accepted an offering price below the $6.46 closing price for Instinet stock on Friday because the recent run-up in the shares amid merger speculation was perceived to have inflated the stock artificially.

The sale price of $1.8bn reflects a significant premium on Instinet shares last September when Reuters first hinted at a sale and they were trading at $4.84.

The Nasdaq will have full control of both the Inet ECN and of Instinet's broker-dealer division. However, people close to the matter said the Nasdaq would need to dispose of the latter to avoid competing with a large number of its customers. Silver Lake Partners, a private equity group, is understood to be a likely buyer of the broker-dealer.

Regulatory approval of the purchase is expected to take about six months and the transaction is expected to close by the end of the year.

The Instinet purchase is Nasdaq's second major acquisition. It bought Brut, another ECN, last summer.

The Instinet deal, which is expected to be announced before Reuters reports its annual revenue figures on Wednesday, will be the largest disposal by Reuters since it launched its Fast Forward restructuring two years ago.

The electronic information and media company is expected to receive about $1bn for its 63 per cent stake in the US group. Reuters, which realised £223m from non-core disposals last year, is expected to return part of the proceeds to shareholders.

Reuters and Nasdaq declined to comment.