LSE agree deal to merge with German rival

Billed as a “merger of equals”, the deal will see the LSE make up 45.6 per cent of the joint firm and Deutsche Borse the remaining 54.4 per cent.

Xavier Rolet, chief executive of London Stock Exchange Group, said: “We are creating an industry-defining combination which will be a leading global market infrastructure business.”

The pair announced they were in talks last month, but since then there has been the threat of the deal being gatecrashed after the owner of the New York Stock Exchange said it was considering a rival bid for the LSE.

Intercontinental Exchange confirmed it was mulling a possible offer earlier this month, while Chicago’s CME Group was also reportedly considering entering the fray.

Under the merger plans, the combined LSE and Deutsche Borse will maintain headquarters in London and Frankfurt, while it will also be listed on the LSE and Frankfurt Stock Exchange.

But the as-yet-unnamed group will be domiciled in the UK for tax purposes.

The groups said the deal will “bring together” the might of London as one of the world’s biggest financial centres and Frankfurt - the home of the European Central Bank with access to Europe’s largest economy.

Carsten Kengeter, chief executive of Deutsche Borse, said: “It is the logical evolution for our companies in a fundamentally changing industry.

“As a combined group we will create a European player that will compete on a global basis.”