Deutsche Börse Group, LSE Merger Sees 75% of Shares Tendered

More than 75% of Deutsche Börse shares have been tendered, helping facilitate the merger.

Deutsche Börse AG and the London Stock Exchange Group (LSEG) have taken one step closer to a landmark merger, following the tender of 75% of Deutsche Börse shares under the offer of HLDCO123 PLC, according to a Deutsche Börse filing.

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Last month, shareholders of Deutsche Börse showed their reluctance to approve the merger deal with the LSEG, which followed after the recourse of the Brexit referendum. Subsequently, a special amendment had only required the approval of 60% of shareholders instead of the original 75%, however the deal has since progressed and headwinds still remain.

With the passage of the offer and 75% of shareholders agreeing, the deal certainly looks more promising now than two months ago, when the Brexit fallout threatened to derail the merger. However, shareholders who have not tendered so far are still eligible to participate in the exchange offer, which has been recommended by the Management Board and Supervisory Board of Deutsche Börse.

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As such, an additional acceptance period will expire on 12 August 2016, 24:00 hours (CEST) at the end of the week. The final tender results of the exchange offer will be formally released on August 17, 2016. In addition, the transaction will also still be subject to a number of conditions and oversights, which includes merger control clearance by the EU Commission as well as the approval by financial, securities and other regulatory authorities.

According to Gregor Pottmeyer, Chief Financial Officer (CFO) of Deutsche Börse AG, in a recent statement on the development: “We welcome that a large majority of our shareholders has approved the industry-defining merger of Deutsche Börse Group and London Stock Exchange Group. This high acceptance level is a strong vote of confidence and a major milestone. We will now focus to receive regulatory approvals.”

Headwinds Remain

The deal has remained controversial in Europe, given the resulting size of the newly merged entity. Last month, Portugal’s Finance Minister blasted the deal, threatening antitrust actions against the agreement.

Speaking at the time on the agreement, Portugal’s Finance Minister Mario Centeno warned: “The merger would negatively impact the functioning of the capital market. Such a concentration of trading and trade-related services poses a clear threat to competition. It also endangers the viability of several European stock exchanges.”

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