Deutsche Boerse shareholders back London Stock Exchange merger

[FRANKFURT] The Frankfurt stock exchange Deutsche Boerse on Tuesday said its shareholders had backed a planned merger with the London Stock Exchange (LSE) to create a new global player.

Earlier this month Deutsche Boerse lowered the threshold for shareholder support needed for the tie-up to 60 per cent from 75 per cent, removing a potential spanner in the works for the deal following Britain's vote to leave the European Union.

The 60-per cent level was breached several hours before the midnight deadline, Deutsche Boerse said in a statement.

At 15H00 GMT, the plan had garnered 60.35 per cent of the capital, according to provisional figures.

LSE shareholders already voted overwhelmingly for the tie-up this month.

Under the agreed terms, Deutsche Boerse shareholders will end up with 54.4 per cent of the new holding company's capital, and LSE shareholders with 45.6 per cent.

A possible headache for the two companies' merger plans is the British decision on June 23 to quit the European Union.

Already, media reports have suggested that the headquarters of the merged company may no longer be based in London, as originally planned.

The two groups still need the green light from several national authorities and the European Commission.

Ahead of the Brexit referendum, the two operators had set up a committee, under Deutsche Boerse chairman Joachim Faber, tasked with drawing up recommendations to ensure the group can respond to authorities' demands for obtaining approval.

It is the third tie-up attempt after two earlier failed bids in 2000 and 2004.

In addition to the London market, LSE also operates the Milan stock exchange and LCH Clearnet transaction clearing house.

Deutsche Boerse operates the Frankfurt exchange, as well as the Luxembourg-based clearing house Clearstream and the derivatives platform Eurex.

In addition to its previous ambitions to tie the knot with the LSE, Deutsche Boerse also tried to combine forces with NYSE Euronext in 2011, which operated the New York, Paris, Amsterdam, Brussels and Lisbon exchanges at the time.

A joined LSE and Deutsche Boerse would compete with the likes of CME and ICE in the United States and the Hong Kong stock exchange.

AFP