EU Commission Launches Probe into Deutsche Börse, LSEG Merger

The European Commission has launched a probe into the merger, reflecting antitrust and competition concerns.

The landmark merger between Deutsche Börse AG and the London Stock Exchange Group (LSEG) reached another hurdle this week after European Union (EU) watchdogs launched a probe into the deal that could threaten to monopolize competition in the region, according to a Bloomberg report.

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The opposition to the deal is nothing new, with several other European exchanges, countries, and individuals all voicing their opinions on the merger, pointing to antitrust concerns and the lack of definitive competition given the newly merged group’s potential scope.

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These sentiments were echoed earlier this year by Portugal’s Finance Minister, who blasted the deal, threatening antitrust actions against the agreement. Speaking at the time, 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.”

Optimism Stifled

These concerns have apparently not gone unnoticed, with the European Commission now setting a February 13, 2017 deadline for an in-depth investigation that could potentially ‘threaten to eliminate or significantly reduce choice’. Ironically, the battle is also the latest chapter in a lingering fight to consolidate the two exchanges, with the latest iteration reflecting the third such attempt for Deutsche Börse to merge with the LSEG.

Just four years ago, the EU stifled Deutsche Börse’s plans to buy out NYSE Euronext, already one of the largest exchange operators on the continent. The news of a probe follows optimistic news of the merger in recent weeks, following the passage of another threshold, which saw the tender of 89.04% of Deutsche Börse shares under the offer of HLDCO123 PLC, according to a Deutsche Börse filing.

Previously, a tendered offer of 75% of shares was reached, which represented an important hurdle for the merger between the two groups. For now, it looks to be a bumpy road heading into year-end, with the merger once again facing uncertainty.

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