German exchange in state of flux

The chairman of Deutsche Boerse’s supervisory board said on Wednesday he would not insist on serving another full three-year term amid criticism that he is partly to blame for management missteps.

Shareholder adviser Hermes EOS and other investors have said Joachim Faber should pave the way for a successor after the company’s former CEO stepped down in 2017 amid an insidertrading investigation.

“I reserve the right to prepare for a transition in the chairmanship of the supervisory board during the next term of office,” Faber told shareholders at the company’s annual meeting, where he was up for re-election. He did not elaborate on the timing of the transition.

The German stock exchange operator is seeking to open a new chapter after it became entangled in the insider-trading scandal, a failed merger with the London Stock Exchange (LSE), and a profit warning in 2017.

Theodor Weimer, who took the reins on January 1 as the company’s new CEO, told shareholders that he was on the lookout for acquisitions as one of the pillars of the company’s growth strategy.

Acquisitions were “part of our strategy, in particular where it would complement our business”, said Weimer. The acquisition priorities would include fixed-income securities, energy products, currencies, services for investment funds, data and indices, he said.

But Weimer ruled out some mega deals, a year after the collapse of Deutsche Boerse’s proposed merger with the LSE.

STRATEGY REVIEW

“Transformational transactions, whereby we thereafter no longer hold majority … are not an option for us,” he said.

Soon after taking the helm, Weimer announced that he would be reviewing the company’s strategy.

In April, Deutsche Boerse outlined the broad cornerstones of its plans. Weimer’s comments at Wednesday’s annual general meeting flesh out that road map. More details of the plans are expected later in May.

Other pillars of the strategy were organic growth and investment. Weimer said that Britain’s exit from the EU offered business opportunities.

Deutsche Boerse aimed to win a quarter of the lucrative euro-clearing market from London. “It is up to us, in the interest of our customers, to provide a well-organised transition to a new European market order,” Weimer said.

The CEO has been studying cost cuts and staff reductions.

Weimer said that as many as 50 management-level staff could lose their jobs.