Thu, Jan 12, 2012 - Page 10 News List

EU dislikes NYSE-Deutsche Boerse tie-up plan: source


European regulators consider a merger between stock market operators Deutsche Boerse and NYSE Euronext to be unacceptable, a source said on Tuesday, as the European Commission (EC) approaches making a final decision next month.

The services of European Commissioner for Competition Joaquin Almunia still have reservations and objections to a merger, which would see Deutsche Boerse shareholders own 60 percent of the new combined, Netherlands-incorporated firm, a source familiar with the review said on condition of anonymity.

“It is not certain the Commission could accept” the merger when it considers the deal on Feb. 1 or Feb. 9, the source added.

The European Commission declined to comment.

Last month, the source said that the merger “is difficult for the commission to accept in its current state.”

The Frankfurt and New York exchange operators both indicated on Tuesday they had received no information about the European Commission’s position and would not comment on speculation.

They said they had been told a final decision on the proposed merger would be taken on Feb. 9.

In September last year, they received from the commission a “Statement of Objections” regarding the merger, essentially regarding a potential domination of the equity derivatives trading and clearing segment.

In November, they proposed NYSE Euronext and Deutsche Boerse would each sell off some of their derivatives businesses to allay the commission’s concerns.

The source said that the European Commission’s competition experts, which had estimated the combined exchanges would dominate 90 percent of the derivatives market in Europe, had tested their proposals, but were not satisfied.

“We have also proposed substantial and tangible concessions that address the EC’s competition concerns,” NYSE Euronext said in a statement.

The proposed merger has sparked controversy in the US because it would hand over the New York Stock Exchange to foreign owners and create a powerful force in 24-hour global trading of shares and derivatives.

The value of the combined company would be US$17 billion, according to Dow Jones Newswires.

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