Tuesday 27 September 2016

Stock exchange merger deal wins overwhelming support

Huw Jones

Published 05/07/2016 | 02:30

Financial traders monitor data inside the Deutsche Boerse ahead of the merger with the LSE. Photo: Bloomberg
Financial traders monitor data inside the Deutsche Boerse ahead of the merger with the LSE. Photo: Bloomberg

London Stock Exchange shareholders backed a £20bn (€23.85bn) merger with Deutsche Boerse yesterday, after its chairman dismissed concerns it was "shackling itself to a corpse".

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LSE chairman Donald Brydon told an extraordinary meeting of shareholders, held to vote on the all-share merger to create one of the world's biggest bourses, that he was confident of "satisfactory" regulatory approval for the deal from Brussels.

"There is no reason to think otherwise today," Mr Brydon said.

Shareholders voted by an overwhelming 99.98pc in favour of the deal.

Around 50 shareholders gathered for the subdued, short meeting. It was free of demonstrations, with only two questions asked.

Dinesh Jain, an individual shareholder, asked why, given that Britain was leaving the EU, "do we want to shackle ourselves to a corpse".

The exchange should abandon the merger as it seemed "unlikely" that Germany would now approve it given that Britain would be outside the EU, Jain said.

LSEG should instead to be looking to do deals with "lively" Asian or Latin American exchanges, Mr Jain said.

He asked whether any American or other exchange had made a counterbid, and about any threat to LSEG's business from French President Francois Hollande's desire to repatriate euro-denominated clearing to the Eurozone.

Mr Brydon said Mr Hollande's comments were a measure of how valuable LSEG's operations were.

"You are quite right, there are some people already seeking to pick over the bones of the UK very, very rapidly indeed. Everyone would be wise to take things a step at a time in this area," Mr Brydon said

LSEG's LCH.Clearnet is the main clearing house in Europe for euro-denominated swaps.

Mr Brydon denied that LSEG had received any approaches from any company other than Deutsche Boerse.

Britain would remain in the EU for at least another two years, during which there was ample time to work out the "optimal structure" for the deal, Mr Brydon said.

Last week German markets regulator BaFin said it was hard to see how the head office of the merged group could still be in London post-Brexit. (Reuters)

Irish Independent

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