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Deutsche Börse, LSE Agree Merger Plan

Deutsche Boerse CEO Carsten Kengeter source picture alliance - Sven Simon
Deutsche Börse CEO Carsten Kengeter will become the new boss of the merged firms.
  • Why it matters

    Why it matters

    The merger plan of Deutsche Börse and London Stock Exchange could still fall apart if rival U.S. exchanges make a counteroffer for LSE or anti-trust regulators block the deal.

  • Facts

    Facts

    • Deutsche Börse wants to merge with the London Stock Exchange in an all share transaction, creating the world’s second-largest bourse operator.
    • Atlanta-based Intercontinental Exchange, owner of NYSE and the Chicago Mercantile Exchange, could make a counterbid for LSE.
    • Deutsche Börse failed in 2000 and in 2004 to merge with LSE, and in 2011 its attempt to buy NYSE Euronext was blocked by the European Commision.
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Deutsche Börse and the London Stock Exchange have agreed on details to merge in an-all share transaction, creating a trading platform valued at $30.6 billion.

The “merger of equals”, as the two companies called it on Wednesday, would be Deutsche Börse’s third attempt to buy or merge with LSE, following two failed attempts in 2000 and 2004. The two firms announced they were in new merger talks last month.

The deal, however, could be scuppered by U.S. rivals. Two weeks ago, Atlanta-based Intercontinental Exchange said it might make a counteroffer for LSE, while Bloomberg reported that the Chicago Mercantile Exchange was also considering a hostile bid.

“I haven’t heard how they want to respond if there were a counteroffer for LSE,” Dieter Hein, an analyst at research firm Fairesearch located near Frankfurt, told Handelsblatt Global Edition.

Deutsche Börse’s chief executive Carsten Kengeter will lead the new company, which will be headquartered in London. Mr. Kengeter, a former UBS and Goldman Sachs investment banker, is keen on taking the number 1 or 2 position in the markets it operates in and earlier this month warned of the risk of becoming smaller compared with other rivals.

“As a combined group we will create a European player that will compete on a global basis,” Mr. Kengeter said in a statement on Wednesday.

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