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.