 £22 billion merger with Deutsche Borse over "monopoly" concerns.){kind=link}
Europe blocks London Stock Exchange Deutsche Borse £22 billion merger
The European Commission (EC) has blocked the London Stock Exchange’s (LON:LSE) £22 billion merger with Deutsche Borse, over concerns that it would create a “monopoly”.
The titan merger, which was proposed over a year ago, would have seen the creation of a European giant for the trading of stocks, bonds and complex financial products to challenge rival markets in the US and Asia.
EU Commissioner Margrethe Vestager commented on the decision:
“The Commission cannot allow the creation of monopolies, and this is what would have happened in this case.
“And this is why we have prohibited this merger, for the benefits of competition in Europe in financial markets, to the benefit of European business and therefore also European citizens.”
Vestager denied however, that the decision was influenced by impending Brexit negotiations. She commented:
“The UK is part of the EU until it is not any more, which means it is part and parcel of the legislation and the merger review.
“Triggering negotiations today isn’t the end of the procedure, it’s the beginning of the procedure,” she said, referring to Theresa May’s formal triggering of Article 50, in a letter which will be received by Brussels today.
Ultimately, the commission argued that the parties involved had failed to adequately concerns of competition restriction.
“As the parties failed to offer the remedies required to address our competition concerns, the commission has decided to prohibit the merger.” Vestager added.
In response to the decision, which was not unexpected, The London Stock Exchange Group expressed their disappointment in a statement. The company said that the proposed merger “would have preserved credible and robust competition in all markets”.
This marked the third attempt at securing merger between the two companies after previous failures in 2000 and 2005, respectively.
Shares in the London Stock Exchange are currently up 2.25 percent as of 12.45PM. (GMT).