£20bn exchanges tie-up under spotlight

THE London Stock Exchange and its wouldbe merger partners the Deutsche Borse in Germany are to call a special referendum committee to examine the effect of Brexit on the controversial deal.

The £20billion merger was agreed in March and last week’s shock vote will now be examined by the committee, including three directors from each stock exchange, amid growing pressure for the agreement to be changed.

A spokesperson from the Deutsche Borse said: ‘The Referendum Committee will now examine all regulatory, legal and jurisdictional consequences for the merger arising from the vote for Brexit as well as its implications for the ongoing operations of the future Deutsche Borse-LSE combination.’

The deal is already coming under pressure after top German politicians said the new group can no longer be headquartered in London as previously planned.

Dr Michael Fuchs, vice chairman of Germany’s ruling CDU party, said: ‘Things have changed and the Brexit vote has consequences. The merged company cannot be based in London.’

Last Friday, the London and German stock exchanges put out a joint announcement, stressing they remain committed to the merger and ‘the agreed and binding merger terms,’ which would include the location for the group’s HQ.

Privately however, people within the German exchange suggest that even though the London HQ has been described as non-negotiable, all bets are off after the vote.

‘Everything is under discussion. It’s a complex deal, with a lot of pressure points,’ said one Deutsche Borse source.