Deutsche Börse’s failed merger with the London Stock Exchange (LSE) could cause an internal shakeup at the highest level with Chief Executive Carsten Kengeter’s contract uncertain moving forward. The failed bid ultimately might not be enough for Kengeter to remain in his role, after nearly a year of negotiations that were stonewalled by the European Commission on grounds of monopolistic and antitrust fears.
Late last month, the European Commission formally prohibited the proposed merger between Deutsche Börse and LSE, citing EU merger regulatory actions. The merger between Deutsche Börse and the LSE had been on hold after the European Commission was in the process of exercising its veto power to block the deal, having ultimately extinguished all hopes of a successful merger.
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Despite lingering issues, the proposed merger would have resulted in the aggregated activities of the two largest European stock exchange operators, Deutsche Börse and the LSE. The deal had drawn ire from many officials and rival exchanges, which collectively warned the deal would undermine any feasible competition given the utter scale of the newly combined entity.
Deutsche Börse’s supervisory board appeared reluctant at best to approve an extension of Chief Executive Mr. Kengeter’s contract however, suggesting the feelings internally with the group may be bitterer than on the surface. Mr. Kengeter’s contract as Chief Executive is due to expire in March 2018.
Deutsche Börse’s directors could make a decision potentially later this month, according to a Reuters report. Another element that may also prevent Deutsche Börse’s Board from giving Mr. Kengeter another full term is a pending investigation into insider trading. For many investors, any charges facing the group could be the final straw, especially on the back end of months of negotiations that came up short.
Mr. Kengeter had previously been criticized for underestimating the political ramifications surrounding the merger. The merger faced heavy opposition from regional exchanges and a litany of other rivals and venues.