LSE-Deutsche Boerse merger plan being investigated

The Stock Exchange Image copyright Reuters

The European Commission is planning to open an in-depth investigation into the planned £21bn merger of London's Stock Exchange and Germany's Deutsche Boerse.

The scheme would combine the stock exchanges of the UK, Germany and Italy and some big clearing houses to create Europe's largest exchange operator.

Commissioner Margrethe Vestager said it had to make sure that financial markets remained "competitive".

Shareholders of the LSE and Deutsche Boerse have already approved the plan.

The European Union's anti-trust watchdog says such a merger could eliminate competition in areas such as bonds, derivatives and repurchasing agreements.

The LSE said that to deal with the body's concerns, it would try to dispose of its French subsidiary LCH.

Job losses

Each of the companies has more than 5,000 staff and in June, the LSE said that the merger could lead to as many as 1,250 job losses.

The deal is expected to produce £215m in annual cost savings over five years, with £138m of those achieved by the third year, while the headquarters in London and Frankfurt would both be kept.

If it goes ahead, LSE shareholders will own 45.6% of the new holding company with the rest being held by Deutsche Boerse shareholders.

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