Bourse merger to go to vote

SHAREHOLDERS of the London Stock Exchange will vote on Monday whether to back a $27bn merger with Deutsche Börse, even though the deal may have to be tweaked.

SHAREHOLDERS of the London Stock Exchange will vote on Monday whether to back a $27bn merger with Deutsche Boerse, even though the deal may have to be tweaked after Britain’s decision to leave the EU.

The two exchanges have insisted that their all-share merger to create the world’s biggest bourse by revenue was essentially “Brexit proof”, but the result of Britain’s June 23 referendum has cast a shadow over the deal.

The German markets watchdog, BaFin, said last week that London could not host the headquarters of the planned European stock exchange giant if London was outside the bloc, saying it would be hard to imagine that the most important exchange in the eurozone would be steered from a headquarters outside the EU.

Shareholders of the 318year-old London exchange will vote on Monday on what is London’s third attempt to merge with Deutsche Boerse in 16 years, the previous plans scuppered by a band of British stockbrokers, and a failed counterbid from Stockholm’s bourse. Sources close to the deal have said they expect LSE shareholders to approve the merger.

Deutsche Boerse shareholders are being asked to approve the tender offer in a postal vote that will be completed by July 12.

Regulatory approval is seen as a major hurdle. While BaFin cannot veto the deal, its concerns are likely to be taken seriously by Deutsche Boerse — and by the German state of Hesse, where Deutsche Boerse is based. Hesse has veto power, along with the EU’s competition unit.

When the Brexit vote result was announced on June 24, the London exchange said the deal would go ahead as planned without any changes to the terms.