Po­ten­tial deal tripped up by com­pe­ti­tion con­cerns and fall­out from Brexit

New Straits Times - - Business -


THE Euro­pean Union blocked the block­buster merger of the Lon­don Stock Ex­change (LSE) with Ger­many’s Deutsche Bo­erse yes­ter­day, snagged by com­pe­ti­tion con­cerns and the fall­out from Brexit.

“As the par­ties failed to of­fer the reme­dies re­quired to ad­dress our com­pe­ti­tion con­cerns, the com­mis­sion has de­cided to pro­hibit the merger,” said Euro­pean Union Com­pe­ti­tion Com­mis­sioner Mar­grethe Vestager.

The de­ci­sion was widely ex­pected af­ter the LSE last month said it had re­fused the Euro­pean Com­mis­sion’s re­quest to di­vest its ma­jor­ity stake in Ital­ian trad­ing plat­form MTS.

The com­mis­sion said the sale of MTS would have pre­vented a mo­nop­oly in the trad­ing of bonds and pro­vided a “clear cut rem­edy to meet these con­cerns.”

The block­buster merger was un­veiled to much fan­fare last year and vig­or­ously backed by both sides even in face of Brexit.

But con­cerns grew in Ger­many af­ter it was re­vealed that the merged com­pany would be head­quar­tered in a soon to be non-EU Lon­don and not Frank­furt.

The pro­posed tie-up also drew crit­i­cism from France, Bel­gium, Por­tu­gal and the Nether­lands, fear­ful for the fu­ture of their own stock ex­changes, owned by Euronext.

It is the third time that the Frank­furt and Lon­don stock ex­changes have tried to tie the knot, fol­low­ing two un­suc­cess­ful at­tempts in 2000 and 2005.

The devel­op­ment could now reignite in­ter­est from United States-based global mar­kets op­er­a­tor In­ter­con­ti­nen­tal Ex­change — owner of the New York Stock Ex­change — which had de­cided against bid­ding for the LSE last May.

Deutsche Bo­erse, which also op­er­ates the Lux­em­bourg-based clear­ing house Clearstream and the de­riv­a­tives plat­form Eurex, this month said it still had global am­bi­tions de­spite the fail­ure. AFP


The fail­ure of the Lon­don Stock Ex­change merger may reignite in­ter­est from United States-based mar­ket op­er­a­tor In­ter­con­ti­nen­tal Ex­change, which owns the New York Stock Ex­change.

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