Deutsche Boerse investors back US$13.5 billion London Stock Exchange purchase

PUBLISHED : Wednesday, 27 July, 2016, 8:53am
UPDATED : Wednesday, 27 July, 2016, 8:53am

Deutsche Boerse shareholders have accepted the company’s £10.3 billion (US$13.5 billion) takeover of London Stock Exchange Group, bringing the firms a step closer to forming Europe’s dominant exchange operator.

Investors owning 60.4 per cent of Deutsche Boerse’s shares now support the deal, the company said in a statement Tuesday. That takes the company above the 60 per cent threshold it needs to move forward with its plan.

The companies’ battle to join forces has already faced several challenges.

German authorities, for example, have recoiled at the prospect of their exchange’s holding company having its headquarters in London. The City will be outside the European Union once the UK leaves the bloc.

Leaders in France and Germany are at the same time jockeying to take euro-denominated clearing away from Britain. LSE’s LCH unit is the world’s largest clearer of interest-rate swaps, and clearing is one of the key rationales for the tie-up.

The deal still needs to be approved by both the European Commission and national regulators. In written submissions to the commission, Belgium and Portugal have said they oppose the tie-up because they believe it would reduce competition. In both countries, the national stock exchange is run by Euronext, a smaller rival to Deutsche Boerse and LSE. Previous takeover attempts by the German exchange operator failed in 2000 and 2005.

Deutsche Boerse lowered the level of support needed to 60 per cent from 75 per cent on July 11, arguing that the change was necessary to accommodate passive investors. Deutsche Boerse gave investors an extra two weeks to tender their shares.