Brexit places question mark over London HQ for Deutsche Boerse, LSE merger: report

[BERLIN] The Frankfurt and London stock exchanges will not base a merged headquarters in London, German media reported on Wednesday, in the latest fallout from Britons' shock vote to leave the EU.

Stock market operators Deutsche Boerse and London Stock Exchange (LSE) had hoped to manage both exchanges from London following a planned merger.

But bosses have come under pressure from regulators and politicians to base the new company within the European Union since the June 23 referendum on British EU membership ended with a win for "Leave", business daily Handelsblatt reported.

Instead, the merged businesses could create a "double holding" company, allowing them to get around clauses in the legally-binding merger agreement that specify London as the HQ.

"A structure like that does cost money, but that way the merger could succeed despite the threat of Brexit," a major Deutsche Boerse shareholder told Handelsblatt.

Deutsche Boerse chief Carsten Kengeter has "promised" shareholders that the double holding structure will allow the deal to go ahead, Munich-based daily Sueddeutsche Zeitung reported.

Handelsblatt further suggested that the company was examining placing the joint HQ in Frankfurt alone - or even in a third, "neutral" city such as Amsterdam.

Deutsche Boerse and LSE have sought to calm fears that their third attempt at a merger will fall through because of the British vote, saying in a statement on Tuesday that "the combined group will meet all regulatory requirements".

An overwhelming majority of LSE shareholders backed the deal on Monday.

AFP