Deutsche Börse, London Stock Exchange Merger Still On Track Post Brexit

The UK's decision to leave the EU will not derail the Deutsche Börse-LSE merger, with shareholders to vote in July.

The merger agreement between Deutsche Börse and the London Stock Exchange (LSE) now seems like ancient history, and not just because of the passage of three months time – voters and shareholders already skeptical of the deal now get to grapple the financial uncertainty wrought by a Brexit after the UK’s EU referendum resulted in a ‘Leave’ victory.

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As such, Deutsche Börse has released a statement that the referendum vote was not conditional on the merger deal itself, as reiterated by shareholder documents published earlier this month on 1 June 2016. Despite the voting results, which showed a majority view backing a split with the EU, the merger will still go through the requisite process of obtaining approvals, and at this moment is still green lit.

While the announcement does relieve some nerves, the real power remains in the hands of shareholders from both groups in the upcoming month. In particular, LSEG shareholders will be given a chance to approve or back the merger at the Court Meeting and LSEG General Meeting on July 4, with Deutsche Börse shareholders able to tender their approval on 12 July 2016.

According to Joachim Faber, Chairman of the Supervisory Board of Deutsche Börse and Chairman of the Referendum Committee, in a recent statement on the Brexit fallout: “The decision of the UK to leave the EU makes it ever more important to maintain and foster ties between the UK and Europe. We are convinced that the importance of the proposed combination of Deutsche Börse and LSEG has increased even further for our customers and will provide benefits for them as well as our shareholders and other stakeholders.”

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