EU Moves to Block NYSE-Deutsche Boerse Merger on Anti-Trust Concerns
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According to sources, the European Commission, regulators of the European Union, have preliminarily rejected the proposed merger between the NYSE Euronext and Deutsche Boerse over the combined monopoly fears of the two derivative markets.
Spokespersons from both the Deutsche Boerse and the NYSE Euronext have reported in separate statements that they have not received any notice from the EU regulators, while a spokeswoman for the European Commission’s anti-trust department declined comment.
According to sources, the European Commission, regulators of the European Union, have preliminarily rejected the proposed merger between the NYSE Euronext and Deutsche Boerse over the combined monopoly fears of the two derivative markets.
Spokespersons from both the Deutsche Boerse and the NYSE Euronext have reported in separate statements that they have not received any notice from the EU regulators, while a spokeswoman for the European Commission’s anti-trust department declined comment.
However, according to sources close to the deal, the EU is looking to prohibit the planned $10 billion merger. Should the merger push through, it would make the cross-border marriage the largest operator of stock exchanges in the world, and would unfairly dominate trading of financial derivatives in Europe by taking up more than 90 percent of all exchange trading.
More Information on the NYSE here, and here.
According to the Wall Street Journal, Deutsche Boerse and NYSE Euronext have already begun lobbying individual commissioners in an effort to dispute the antitrust examiners’ analysis of the combination, which focused on competition in exchange-listed futures and options and did not take into account derivatives traded off-exchange.
Calling for support, both the NYSE Euronext and Deutsche Boerse have said that the merger would help consolidate more European trading under a single roof and enable the company to partner up with fast-growing emerging markets, especially those in Asia.
While a collapse of the deal would no doubt be a huge disappointment for both companies, both the NYSE Euronext and Deutsche Boerse have insisted that they would we able to thrive on their own if the deal foundered.
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Despite European officials raising the red anti-trust flags for months, the deal passed with minimal restrictions with the U.S. anti-trust officials last month.
Some good news for the two companies though.
According to research conducted by BMO Capital Markets, commissioners have broken with European Union regulators in the past, including Oracle’s 2012 acquisition of Sun Microsystems. However, on average, only 10 percent of mergers that undergo an in-depth EU review survive the pressure from antitrust regulators.
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