Euronext reportedly looking to block LSE-Deutsche Boerse merger

Rick Steves

The “merger of equals” between the London Stock Exchange and the Deutsche Boerse has been the focus of extended discussion involving not only leaders of the financial sector but also politicians. Not only has there been resistance to the merger among some in both German and British side, but now the stock exchange operator Euronext […]

Euronext reportedly looking to block LSE-Deutsche Boerse merger

The “merger of equals” between the London Stock Exchange and the Deutsche Boerse has been the focus of extended discussion involving not only leaders of the financial sector but also politicians.

Not only has there been resistance to the merger among some in both German and British side, but now the stock exchange operator Euronext NV wants to add further pressure against a deal, arguing that it would hurt competition in the region.

It has been reported that Euronext, concerned of having its role in European trading at risk, is gathered with consultants and lawyers to prepare a case to bring to Brussels, where they will make their point to European regulators.

euronext

If a merger deal goes through, the combination between the London Stock Exchange and the Deutsche Boerse, market values at $14 and $16 billion respectively, would become the second biggest exchange in the world and potentially turn Euronext closer to irrelevant in the European scene, with a market value at $2.9 billion. With that scenario in mind, the firm is considering lobbying in favor of an imminent counterbid of the U.S. Intercontinental Exchange Inc., whose strategy is said to include selling Italian exchange Borsa Italiana and the French clearing unit, which might interest Euronext.

Some of the Euronext’s latest moves seem to suggest that much. After hiring BNP Paribas SA and Rothschild & Co. for purposes of asset acquisition advisory, the company named BNP Paribas banker Giorgio Modica – responsible for stock exchanges in Italian and Spanish markets at BNP Paribas and experienced in M&A of exchanges – as CFO earlier this week.

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