Jacques Chirac waded into the takeover battle for Euronext yesterday by declaring he preferred a "Franco-German solution" with Deutsche Börse to the merger between the Paris-based group and the New York Stock Exchange (NYSE) that was agreed last week.
The French president's attempt to influence the fate of Euronext had echoes of recent state intervention to ward off foreign bids for Arcelor and Gaz de France. His comments also reflect a feeling in French financial circles that Euronext has rushed into a merger with NYSE without examining all the possibilities of a deal with Deutsche Börse that could make more sense for the euro zone.
Mr Chirac said: "I will not hide the fact that I favour the Franco-German solution for reasons of principle, and I would regret it if this solution is not adopted in the end."
Angela Merkel, Germany's chancellor, was more reserved, saying: "We have always thought that in Europe it is good to build strong economic units." But she added that any merger would be "a purely economic decision" and said "these are events over which we can exert no influence".
Henri de Castries, chief executive of French insurer Axa, a large shareholder and customer of Euronext, said: "We are saying: 'Take your time and put yourself in a situation to be sure you have extracted the best proposal'. We are not entirely convinced we are there yet."
The growing doubts about the deal come amid signs that a pan-European exchange would have been a preference of many customers concerned about the impact a merger with NYSE might have on the cost of doing business. A significant minority of shareholders favours a deal with Deutsche Börse, noting that under the deal proposed by NYSE, there are few opportunities to reduce costs. Deutsche Börse is still trying to convince Euronext shareholders of the merits of the deal, with hints that they may offer more concessions.
Reto Francioni, Deutsche Börse's chief executive, said: "Politicians understand more and more the strategic questions of Europe's capital markets. In this sense, Mr Chirac's position is very positive for the markets and for the euro."
