Exchanges look to EU for tie-up backing

Deutsche Boerse and NYSE Euronext formally sought EU approval for their planned £5bn tie-up yesterday, triggering a lengthy review expected to focus on the derivatives and clearing businesses.

The two exchanges struck a deal in February to create the world’s number one exchange operator, trading in almost every asset class and with operations on both sides of the Atlantic.

“Deutsche Boerse and NYSE Euronext confirm that they have formally notified their planned business combination to the European Commission’s Directorate-General for Competition,” the exchanges said in a statement.

Hide Ad
Hide Ad

The European Commission said the preliminary review would take until August 4. This ‘phase 1’ review takes 25 working days and may be extended by 10 days if the companies offer concessions to ease any competition concerns.

The regulator can open an in-depth investigation lasting for up to 90 additional working days and can further extend this for another 15 days.

The review is expected to take five months or more, with the spotlight on the merged group’s dominance in European listed derivatives and potentially strong position in European clearing.

Together, Deutsche Boerse’s Eurex platform and NYSE Euronext’s Liffe exchange control more than 90 per cent of European listed futures trading, according to data from the World Federation of Exchanges. The fact the exchanges have been informally talking to the European regulator in the last four months could work in their favour, said Luc Gyselen, a partner at law firm Arnold & Porter.