The LSE–Deutsche Börse Merger Is Our Very Own Project Zeus
The collapse of the London Stock Exchange and Deustche Börse deal doesn't come as much of a surprise.
If you’re unfamiliar with the legendary UK sitcom Peep Show, the words “Project Zeus” may not mean too much to you, but I think it’s the perfect analogy to sum up what has been a doomed-from-the-start exercise in wild corporate ambition and lack of a wider perspective.
Project Zeus, an insane plan hatched by an egotistic boss to make marketing a branch of sales and then passed down to a junior flunky to somehow formulate before crashing in spectacular fashion, succinctly encapsulates the spirit of the protracted plan to merge the London Stock Exchange and Deutsche Börse businesses.
The plan to create a super-exchange never really looked like it would succeed, even after a confident start from both parties that the promised “merger of equals”—despite the fact that the German group would own more shares in the combined entity than its UK counterpart—would benefit all.
Concerns were soon raised by the European Commission that any deal between the two would create a clearing super-power that would quickly crush any competition left in the European market, namely Euronext, and usher in a new monopoly.
Ultimately it was this concern, along with LSEG’s outright refusal to sell its stake in Italian bond trading platform MTS (which supplies vital trading feeds to LSEG’s clearing business LCH.Clearnet) that forced the European Commission’s hand, in a move that didn’t really surprise anyone who had been following the story.
Both exchange parties should have been aware that completing this deal was always going to be a long shot, not least because it’s the third attempt to do so since the turn of the millennium, but also because of wider developments.
The merger was first announced to the public four months before the UK made its decision to leave the European Union (the deal has, rather coincidentally, been scuppered on the same day Article 50 was triggered) and while both LSEG and Deutsche Börse shrugged off any possible adverse effects of Brexit, it’s hard not to see a degree of influence.
In the end, Project Zeus grinds to a halt as Mark realizes that the idea is simply unfeasible and his team have all slowly abandoned him, before he then literally runs away to hide out in a nearby car park.
Of course that is where fiction deviates from reality and life will go on for both LSEG and Deutsche Börse. It would be naïve to believe that either party lacks a contingency plan, but it seems to me that the London exchange operator is now in a weaker position and could be vulnerable to a takeover bid from North America. Whether that transpires or not remains to be seen, but sometimes, just sometimes, life imitates art just a little too perfectly.
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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
The IMD Wrap: Quality drivers—the sticks and carrots accelerating the data quality race
Like a Formula One Grand Prix, data management is a race that can be won or lost. And just as each race is part of a larger F1 championship that pays large sums of TV money to the winning team, winning or losing one race can contribute to winning or losing an endgame with much more at stake.
This Week: Clear Street, Hudson River Trading/Google Cloud, Alveo and more
A summary of the latest financial technology news.
Start-up uses ‘Magic’ to democratize access to AI for hedge funds
Spun out of Brevan Howard five years ago, SigTech hopes its new no-code generative AI offering can help smaller buy-siders even the odds with AI models.
JP Morgan touts DLT, tokens for collateral management
Distributed-ledger technology could make moving non-cash collateral more efficient, said managing director Toks Oyebode during an Isda conference on Thursday.
Waters Wrap: The changing definition and perception of blockchain
Anthony says that questions of definition and perception are killing DLT projects in the capital markets—oh, and a lack of proven implementations.
This Week: IPC extends Google Cloud partnership, BlackRock/AIA, DTCC and more
A summary of the latest financial technology news.
Waters Wavelength Podcast: Deutsche Bank’s Boon-Hiong Chan
Boon-Hiong Chan from Deutsche Bank joins the podcast to talk about blockchain interoperability.
SocGen pushes data, analytics use cases for SG Markets
The bank is letting a handful of clients experiment with its proprietary data and models to inform their research.