Deutsche Boerse, LSE see €450m cost savings in merger

But NYSE owner Intercontinental Exchange may launch rival bid for British firm

The London Stock Exchange reached a deal on a merger with German rival Deutsche Borse  to create one of the biggest exchange companies in the world. Photograph: Phil Toscano/PA Wire

The London Stock Exchange reached a deal on a merger with German rival Deutsche Borse to create one of the biggest exchange companies in the world. Photograph: Phil Toscano/PA Wire

 

Deutsche Boerse and London Stock Exchange Group (LSEG) said they had reached a merger agreement and saw potential cost savings of €450 million per year for the combined company.

“The combination will offer significant value creation potential,” Deutsche Boerse said in a statement on Wednesday.

LSEG’s current chairman Donald Brydon would be chairman of the new company, while Deutsche Boerse’s Carsten Kengeter would be its chief executive, Deutsche Boerse and LSEG both said.

The combined companies’ board would be made up of equal numbers of LSE and Deutsche Boerse directors.

The new firm, which will be domiciled in Britain, with a primary listing in the blue-chip FTSE 100, will also have a home on the Frankfurt Stock Exchange and have corporate headquarters in both cities.

Nearly 16 years after their first attempt to merge, the London and Frankfurt exchanges last month confirmed they were holding detailed discussions on an all-share merger.

The deal would combine the LSE’s share-trading operation with the derivatives trading of Deutsche Boerse’s Eurex in a group worth $30 billion.

Their deal, however, may yet prompt a takeover battle after New York Stock Exchange owner Intercontinental Exchange said it was considering making a bid for the British firm.

LSEG, which was created in 2007 when London Stock Exchange merged with Milan stock exchange Borsa Italiana, said its shareholders would receive a dividend of 25.2 pence per LSEG share for the six-month period ended December 31st.

Reuters