Newspaper article THE JOURNAL RECORD

Vote to Consider Stock Exchange Merger May Face Delay

Newspaper article THE JOURNAL RECORD

Vote to Consider Stock Exchange Merger May Face Delay

Article excerpt

FRANKFURT, Germany (AP) -- Amid accusations that Deutsche Boerse is selling out to its British-based rival, an official at the Frankfurt-based stock exchange said Monday he would rather postpone a vote this week on the proposed merger with the London Stock Exchange than have it fall through.

The plan announced earlier this month creating a market called iX, for International Exchanges, was initially hailed as a European counterweight to the New York Stock Exchange. But critics on both sides of the English Channel have been criticizing it lately, saying they will sacrifice too much under the deal.

The proposal faces its first hurdle today, when Deutsche Boerse's supervisory board is scheduled to vote on the merger amid rampant speculation they will postpone a decision to hammer out details both sides are still squabbling about.

"It would be a complete disaster if the merger were to fall apart," Klaus Patig, vice chairman of Deutsche Boerse's supervisory board, said Monday. "I would be in favor of a `consideration period' if there's no decision" at today's meeting.

Werner Seifert, chief executive of Deutsche Boerse who will be chief executive officer of iX, still stands solidly behind the merger. He has consistently said iX will slash transaction costs for investors because the enlarged bourse will have a bigger pool of buyers and sellers and increased economies of scale.

Problems cropped up last week when some Deutsche Boerse board members and the exchange's regulator said the merger plans would threaten Frankfurt's long-term future as an international financial center.

The regulator, Economics Minister Dieter Posch in Hesse state where Frankfurt is located, said he would not sign off on the deal until certain details were clarified. Those include which German companies would be listed in London, whether London trading would be more expensive for German investors and whether Frankfurt could be guaranteed the role of trading high-growth stocks into the future. …

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