Deutsche Boerse and London Stock Exchange merger

Overview:

• London Stock Exchange Group (LSE) and Deutsche Boerse agreed to merge in a €24 billion all-share deal and form Europe's largest stock exchange operator, but the deal was blocked by the European Commission.
• The European Commission refused to approve the deal on the grounds it 'would have created a de facto monopoly in the markets for clearing fixed income instruments'.
• Both companies, which operate London and Frankfurt's stock exchanges respectively, asked shareholders to vote on the agreed terms of merger in July 2016, receiving the necessary levels of approval needed for the deal to proceed.
• LSE shareholders were almost unanimously in favour of the merger.
• Just over 60% of Deutsche Boerse's shareholders voted for the deal, which surpassed the 60% acceptance threshold the company had set. 
• Several European countries objected to the merger, concerned the combined exchanges could diminish the appeal of their domestic financial centres.  
• German politicians had concerns about plans to base the merged business in London, which have been exacerbated UK's decision to leave the EU.     
• US and Russian regulators have approved the deal.
• National and European regulators must now be satisfied.
• The LSE had offered to sell its clearing business, LCH.Clearnet Group, to appease the Commission's concerns the deal could decrease competition in trading of bank debt and derivatives. 
• In October 2016, the EU extended its initial approval announcement deadline until March 6, 2017 to allow it more time to scrutinise the eventually blocked deal.

Ben Naylor - Regional editor