LSE Shareholders Vote In Favour of Merger With Deutsche Börse: CNBC

Shareholders of the London Stock Exchange Group have voted 99.89 percent in favour of a merger with the German exchange.

Shareholders of the London Stock Exchange Group (LSE) have voted 99.89 percent in favour of a merger with Deutsche Börse, CNBC said today.

The $27 billion deal is said to have come under pressure after the Brexit vote but both exchanges have insisted that the deal is “Brexit proof”.

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Concerns

Nevertheless, German market regulator BaFin has raised concerns over having the headquarters of a eurozone exchange outside the EU if Britain exited the bloc.

Michael Hewson, chief markets analyst at CMC Markets, told CNBC: “While shareholders could well wave this deal through its hard to ignore the difficulties this deal throws up with respect to headquartering.”

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He continued: “Already German regulators are uncomfortable with the idea that the base of operations will be situated in London and given that this deal was always about the lucrative clearing operations and euro denominated derivatives, this deal could well find itself susceptible to further regulatory tweaking in the weeks and months ahead.”

The LSE in a statement in March said that “the potential merger of equals remains conditional on the agreement of other terms and the final approval by the boards. Under the terms of the deal, LSE shareholders will own 45.6 percent of the new holding company, while Deutsche Börse will own 54.4 percent. The merger will also see both firms continue to hold its headquarters in London and Frankfurt.”

Positive Brexit Repurcussions

There are still, however, some analysts who believe thaht Brexit may work in favour of the deal, saying that the Brexit may make the deal more compelling with Deutsche Börse shareholders reported to have been quite positive.

Today marks the third attempt by both exchanges to merge in 16 years, in which Intercontinental Exchange (ICE), the owner of New York Stock Exchange, also considered a potential bid.

 

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