Newspaper article The Journal (Newcastle, England)

LSE-Deutsche Borse Merger Blocked by EU

Newspaper article The Journal (Newcastle, England)

LSE-Deutsche Borse Merger Blocked by EU

Article excerpt

Byline: MERGER BEN WOODS business@ncjmedia.co.uk

EUROPEAN regulators have killed off the London Stock Exchange Group's (LSE) PS24bn merger with Deutsche Borse, saying the deal would have forged a "de facto monopoly".

The European Commission moved to block the deal after it said the two exchanges had failed to address its competition concerns.

The move comes after the LSE rejected the commission's request last month to offload its 60% stake in the Italian trading platform MTS.

Margrethe Vestager, the EU's competition commissioner, said: "The merger between Deutsche Borse and the London Stock Exchange would have significantly reduced competition by creating a de facto monopoly in the crucial area of clearing of fixedincome instruments.

"As the parties failed to offer the remedies required to address our competition concerns, the Commission has decided to prohibit the merger."

The tie-up has faced multiple hurdles since it was first announced in March last year, with Britain's Brexit vote flagged by analysts as a potential barrier that could scupper the deal.

The LSE had agreed to offload its French clearing business LCH to Euronext for [euro]510m (PS434m) to help smooth the passage of the merger.

However, further doubts were raised last month when it was revealed that Deutsche Borse boss Carsten Kengeter was under investigation by German authorities over alleged insider dealing.

It marks the third failed attempt in 17 years to create an Anglo-German exchange and came just hours before Britain began its exit from the European Union by triggering Article 50. In a statement, the LSE said it regretted the EU Commission's decision not to wave through the deal. "LSEG believes the proposed merger with Deutsche Borse in combination with the LCH SA remedy would have preserved credible and robust competition in all markets.

"This was an opportunity to create a world-leading market infrastructure group anchored in Europe, which would have supported Europe's 23m SMEs and the development of a deeper Capital Markets Union."

The LSE said it disagreed with the EU Commission's findings that LCH SA could not be a "viable stand-alone competitor" without the sale of MTS. …

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