The London Stock Exchange all but ends a planned merger with Deutsche Boerse to create Europe's biggest stock exchange by ruling out meeting a European antitrust demand, saying it has strong prospects alone. Ciara Lee reports.
It would have created a European trading powerhouse. But the London Stock Exchange seems to have pulled the plug on a merger with Deutsche Boerse. The two exchanges struck a 29 billion euro deal just over a year ago. But in a highly unusual step, the LSE has pre-empted a European Commission antitrust decision. It says the EU is unlikely to give clearance for the merger. (SOUNDBITE) (German) CAPITAL MARKETS STRATEGIST, ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "It was clear that the European Union in Brussels would have a word in this. But now that the hold-up is coming from London it puts the entire thing into serious doubt.." The plan to create a financial bridge between continental Europe and Britain, had previously been called into question by Brexit. German politicians had demanded Frankfurt not London be the headquarters of the group because Britain would be leaving the trading bloc. The LSE says the Commission had asked it to sell its 60 percent stake in its Italian fixed-income trading platform MTS to satisfy antitrust concerns. (SOUNDBITE) (English) CITY INDEX, MARKET ANALYST, KEN ODELUGA, SAYING: "The amount of conditions they have needed to make have been mounting up to a stage where they are beginning to look at the deal as untenable." The LSE says selling MTS would be detrimental to its business. The exchanges had already agreed to sell part of LSE's clearing business, in order to satisfy antitrust requirements. Shares in Deutsche Boerse slipped by more than 6 percent on the news, while LSE stock was down by about 1 percent.