Merger Prohibited for the Two Largest European Stock Exchange Operators

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The European Commission has prohibited the proposed merger between Deutsche Börse AG and London Stock Exchange Group under the EU Merger Regulation. The proposed merger would have combined the activities of the two largest European stock exchange operators, Deutsche Börse AG (DBAG) and London Stock Exchange Group (LSEG), who own the stock exchanges of Germany, Italy and the United Kingdom, as well as several of the largest European clearing houses.

The merger would have led to a de facto monopoly in clearing of fixed income instruments (bonds and repurchase agreements) in Europe, where the parties are the only relevant providers of these services. This monopoly in clearing fixed income instruments would also have had a knock-on effect on the downstream markets for settlement, custody and collateral management. In addition, the merger would have removed horizontal competition for the trading and clearing of single stock equity derivatives.

It is the responsibility of the parties to address competition concerns either by rebutting them or by proposing adequate remedies. To be effective, remedies have to address all of the Commission’s competition concerns and be viable long-term.  As the parties failed to offer the remedies required to address our competition concerns, the Commission has decided to prohibit this merger.

The Commission also decided today to register the ‘Minority Safepack’ European Citizens’ Initiative, inviting it “to improve the protection of persons belonging to national and linguistic minorities and strengthen cultural and linguistic diversity in the Union”, starting a one-year process of collection of signatures of support. If it receives one million statements of support within one year, from at least seven different Member States, the Commission will have to react.

The Commission had previously refused to register the ‘Minority Safepack’ Initiative in 2013, as it included proposals outside the frame of the Commission’s legal powers. This Decision was annulled by the General Court of the European Union, and the Commission has now reassessed the proposed Initiative, and decided that it can be registered and statements of support can be collected on the basis of 9 out of the 11 proposals submitted by the organisers, which do meet the criteria of the European Citizens’ Initiative Regulation.

(Source: European Commission)

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