Deutsche Börse Chief Confident About LSE Merger and E.U. Antitrust Approval
Carsten Kengeter, CEO of Deutsche Börse, is confident that the European Commission will approve the planned merger of his firm with the London Stock Exchange (LSE).
In order to overcome Brussels’ concerns, LSE plans to sell its French subsidiary Clearnet SA to competitor Euronext.
“We believe that we can address the vast majority of concerns coming from Brussels,” Mr. Kengeter told Handelsblatt.
Deutsche Börse and LSE earlier this year announced their plans for a “merger of equals” that would create Europe’s largest stock exchange operator and one of the top three exchanges in the world. The two firms are pushing for a merger against the backdrop of Britain’s decision to leave the European Union.
Last week, the European Commission, which has to sign off on the deal, raised several objections to the €25-billion ($26-billion) deal. The main competitors are concerned that the two companies would create a firm with too much market dominance in the clearing of derivative products.
However, the Commission has not yet taken into account the planned sale of Clearnet.
On the other hand, financial auditors and politicians in Germany are bothered by the fact that the mega exchange is legally supposed to be seated in London. Thus, it would be outside of the European Union after Britain leaves the bloc. Yet despite Britain’s looming exit, Mr. Kengeter still wants to stick to the merger.
“The fundamental reasons for this transaction were not weakened by the British referendum,” he said. “They were strengthened”.
The question of the exchange’s legal seat is not currently up for debate, he added.