London Stock Exchange-Deutsche Börse Merger Suffers Potentially Terminal Setback
LSEG refuses European Commission’s antitrust demand to sell stake in Italian platform MTS, placing proposed merger in jeopardy.
In a statement released on February 26, LSEG said it “could not commit” to a divestment of MTS, a regulated electronic trading platform for European wholesale government bonds and other fixed-income securities.
The European Commission had made the divestment recommendation in mid-February in conjunction with a previous requirement that LSEG sell its stake in French clearing house LCH SA. A deal to sell LCH SA to European exchange rival Euronext was announced in January this year.
“The LSEG board believes that it is highly unlikely that a sale of MTS could be satisfactorily achieved, even if LSEG were to give the commitment,” said LSEG’s statement. “Moreover, the LSEG board believes the offer of such a remedy would jeopardize LSEG’s critically important relationships with these regulators and be detrimental to LSEG’s ongoing businesses in Italy and the combined group, were the merger to complete.”
LSEG has said that it will not propose a remedy to the European Commission’s demand and therefore “believes that the Commission is unlikely to provide clearance for the merger” with Deutsche Börse, but will continue its efforts to implement the deal.
A combined LSEG-Deutsche Börse entity would possess the clout to rival international exchange rivals such as Intercontinental Exchange (ICE) and CME Group in the US, but has met with continued resistance from European regulators and competitors, fearing the creation of a European exchange monopoly. The UK’s decision to leave the European Union also created tension between the two exchanges as to where the combined group’s headquarters would be located.
By rejecting the European Commission’s antitrust demand, LSEG looks to have walked away from the proposed merger, despite insisting that it would continue to look for ways to push ahead with the merger and remains convinced of its “strategic benefits.”
However, LSEG was also bullish on its own prospects should the merger collapse, saying in the statement that it is “highly confident in the strength of LSEG’s business, strategy and prospects on a standalone basis” and expects to report “strong progress across all business areas” within its preliminary year end results on March 3.
Should LSEG officially withdraw its interest in the merger, the path may be open for non-European rivals to make an approach for either group; in March last year, a statement from ICE announced the possibility of a counter bid for LSEG, although no formal offer was made.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
WatersTechnology latest edition
Check out our latest edition, plus more than 10 years of our best content.
Getting aggressive: Overbond uses AI to assess dealer axes
The fixed-income analytics specialist has developed a new tool to help buy-side firms decide if they’re getting a good price from their dealers.
TS Imagine integrates LTX’s pre-trade analytics tool
Users of the fixed-income EMS will now have access to LTX’s Liquidity Cloud tool, which provides a pre-trade score for the likelihood of trading success.
European exchanges turn to dark trading in battle for flow
The EU’s two biggest exchanges are launching dark pools this year. The apparent change in their stances on dark trading reflects a profound shift in equities markets.
After contentious Opra upgrades, vendors brace for a faster future
Upgrades to the datafeed widely used to gauge the current market price for options contracts went into effect in February after three separate delays, which market participants say were caused by persistent bandwidth issues at some important recipients.
The IMD Wrap: No more turf wars, or why CDOs should heed the Voice of the CTO
Max reviews how our recent Voice of the CTO series has implications for those beyond a firm’s technology function, and how communication and collaboration between tech, data, and leadership will deliver better results.
Dark horse: Deutsche Börse building dark pool
New functionality allowing exchange members to execute sweep trades comes hot on the heels of European rival Euronext launching its own dark pool.
Waters Wrap: The tough climb for startups
Anthony speaks with two seasoned technologists to better understand why startups have such a tough time getting banks and asset managers to sign on the dotted line.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest