Deutsche Börse Boss Admits Mistakes in Failed LSE Deal

Kengeter Bloomberg 77275986
Picture Source: DPA

It was Carsten Kengeter’s first public appearance since the merger between Deutsche Börse and the London Stock Exchange (LSE) fell apart. Mr. Kengeter, the chief executive of the German stock exchange operator, appeared relaxed during his visit to the Handelsblatt Economic Club, even as he conceded that he had made mistakes in the failed deal.

Mr. Kengeter acknowledged that he had failed to convey the advantages of the €29 billion, or $31 billion, merger with LSE: “We didn’t act as persuasively and emotionally in our communication as maybe was necessary,” he said in front of the approximately 90 club members in Frankfurt.

Mr. Kengeter’s critics had accused him of being naive about the political hurdles the deal would face. “I have to accept the accusation,” he acknowledged.

“I don’t see any large mergers that would be attractive for us now.”

Carsten Kengeter, CEO, Deutsche Börse

Deutsche Börse and LSE had wanted to create a giant European stock exchange, but Britain’s decision to leave the European Union tripped up their plans. The British side pushed to locate the mega exchange’s holdings in London, while German politicians called for a change of plans. Ultimately, the European Commission, the EU executive, blocked the deal because the Londoners did not want to comply with conditions made by the bloc’s competition watchdogs.

Despite his foibles, Mr. Kengeter hopes to continue in his role at the helm of Deutsche Boerse. His current contract, which expires next year, has not yet been renewed by the supervisory board. “I am interested in continuing to help the exchange,” Mr. Kengeter said, “but I’m not going to insist.”

A contract renewal could prove problematic, as Mr. Kengeter faces allegations by the Frankfurt prosecutor’s office that he engaged in insider trading related to the merger. Mr. Kengeter rejected the allegations. Insider trading is something “I could never square with my ethics,” he said.

The Deutsche Börse chief executive has also been humbled in terms of his plans for the exchange operator. In the wake of the failed merger with LSE, Mr. Kengeter said he has lost his taste for mega deals – at least for the time being.

“I don’t see any large mergers that would be attractive for us now,” Mr. Kengeter said. Instead, the exchange needs to grow organically and have a look at small and medium-sized companies that would fit well with Deutsche Börse, he said.


Michael Brächer is a financial editor in the investment team in Frankfurt. To contact the author:

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