Date
20 July 2017
LSE and Deutsche Boerse announced plans to merge in a 29 million euro deal just over a year ago, aiming to create a giant trading powerhouse that would better compete against US rivals. Photo: Reuters
LSE and Deutsche Boerse announced plans to merge in a 29 million euro deal just over a year ago, aiming to create a giant trading powerhouse that would better compete against US rivals. Photo: Reuters

LSE, Deutsche Boerse deal in jeopardy over antitrust fears

London Stock Exchange said its proposed merger with Deutsche Boerse AG was unlikely to be approved by the European Commission, leaving the stock market operators’ third attempt at combining on the brink of failure.

The LSE said in a statement late on Sunday that the commission had asked it to sell its 60 percent stake in fixed-income trading platform MTS to satisfy antitrust concerns over the merger of Europe’s two largest market operators, Reuters reports.

Calling the request “disproportionate,” the British exchange said it believed that it would struggle to sell MTS and that such a sale would be detrimental to its ongoing business.

“Based on the commission’s current position, LSE believes that the commission is unlikely to provide clearance for the merger,” it said.

The exchange added that it would still work to make the merger with Deutsche Boerse succeed, but that would be impossible unless the commission changed its position.

The commission and Deutsche Boerse declined to comment.

The two exchanges announced plans to merge in a 29 million euro deal just over a year ago, aiming to create a giant trading powerhouse that would better compete against US rivals that were starting to encroach on the pair’s turf.

The exchanges had already agreed to sell part of LSE’s clearing business, LCH SA, in order to satisfy antitrust requirements.

LSE said the commission had also raised concerns this month about the impact on the European market landscape of access to bond and repo trading feeds were the two exchanges to merge.

LSE said it had offered certain proposals to address this but that the commission had requested they sell all of MTS instead.

The commission had given the exchanges until Monday to come up with a proposal to meet that demand.

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CG/RA

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