Brussels blocks merger of London and Frankfurt stock exchanges
The decision comes the same day that the British Government plans to officially activate the ‘Brexit’.
The joint revenues of both companies represent more than 4,000 million euros per year and between the two places total more than 3,000 listed companies, which would have made it the European leader of the sector and would have placed in a position of strength to compete with the Operators that dominate the market.
The frustrated union thus lives a new episode of the constant I want and I can not have marked their relationship in the last two decades. This is the third attempt in 17 years to unite both Stock Exchanges without other informal approaches. Brussels had until next April 3 to decide on the matter, but the final date, chance or not, comes in a day loaded with symbolism. «The investigation has concluded that the merger would have significantly reduced competition with the creation of a de facto monopoly in a key sector such as bond markets,» said European Competition Commissioner Margrethe Vestager. This type of operators play a fundamental role in the financing of companies, which use them to obtain a capital that then reverts to the economy as a whole.
The commissioner stressed that neither side proposed sufficient corrective measures to dispel the doubts of the Community executive regarding an excessive concentration of power in the new company. The decision does not surprise those involved. The operator of the London Stock Exchange had already publicly admitted that it considered it unlikely that Brussels would authorize the merger after it refused to accept the last demand of the Community executive, which claimed the sale of its stake in the Italian electronic trading platform MTS for Slimming the structure of the new company. Deutsche Börse CEO Carsten Kengeter has already reacted by downplaying the Competition decision by ensuring that the entity is well prepared to continue its journey alone, although the head of the Supervisory Board of the company, Joachim Faber, regretted that The veto to the agreement «is a setback for Europe» which he called «missed opportunity».
The merger of the exchanges was announced in March last year, before the referendum in which the British decided to end their participation in the community project supporting the Brexit. Deutsche Börse shareholders were expected to receive 54.4% of the shares of the new company and LSE would hold the remaining 45.6%. Since the outcome of the referendum was known, serious problems were already emerging for the union, as the new company was scheduled to establish its headquarters in London. Even so, in July, with the decision of the British on the table, 99.89% of the shareholders of the London Stock Exchange voted in favor of the alliance, now vetoed by Brussels.