Deutsche Börse Eyes Spanish Exchange

German exchange Deutsche Börse approached Spanish exchange operator Bolsas y Mercados Españoles (BME) for a potential merger, according to BME officials. The Deutsche Börse sent a letter to the BME on May 30 to look at possible ways to combine their respective businesses.

Both Deutsche Börse and the BME have in-house systems based on the Hewlett-Packard VMS system, according to Paul Pickup, an IT consultant with Trading Technology. "The two exchanges could combine their businesses on one system rather than two systems," Pickup says. "However, not too many exchanges have achieved big savings by doing so. You still have to buy new systems to sustain the growth of volumes."

Deutsche Börse officials decline to comment. The BME has not responded to the German exchange's letter. BME officials decline to comment.

This latest announcement comes after months of exchange consolidation talks in Europe. In January 2005, Deutsche Börse placed a bid for the London Stock Exchange (LSE) that was turned down. Since then, the German exchange has been trying to merge with the pan-European exchange operator Euronext, which has signed a letter of intent to merge with the New York Stock Exchange (NYSE). The LSE has also been courted by the Nasdaq Stock Market, which bought stock in the LSE after seeing its bid rejected. Both Euronext and Deutsche Börse have approached Borsa Italiana, the Milan-based exchange, for a possible merger.