Doubts Over Merger of London Stock Exchange, Deutsche Boerse

A worker shelters from the rain as he passes the London Stock Exchange in the City of London, UK. (Reuters/Toby Melville/Files)

The London Stock Exchange’s merger with Deutsche Boerse has been thrown into doubt after the LSE decided it couldn’t comply with last-minute conditions imposed by the European Commission.

The merger, announced almost a year ago, would have given the German financial exchange a majority stake in the combined company.

In a statement late Sunday, the London exchange said the European Commission, the executive branch of the European Union, was demanding that it sell its majority stake in MTS, a regulated electronic trading platform for European wholesale government bonds, to resolve competition concerns.

The LSE said this would be “detrimental” to the company’s business in Italy and the fortunes of the combined group if the merger were completed.

It said that its board therefore concluded that “it could not commit to the divestment of MTS,” and that it believes the Commission would likely reject the merger.

Shares in the LSE were down 3.2 percent at 3,025 pence in London while those in Deutsche Boerse were 2.9 percent lower at 79.26 euros in Frankfurt.

The companies had said that merging would allow them to expand and offer customers more products and services.

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