London Stock Exchange, Deutche Boerse In Merger Talks

Almost 16 years after their first attempt to merge, the London and Frankfurt exchanges confirmed they were holding detailed discussions on an all-share merger under a new holding company that would give Deutsche Boerse shareholders a 54.4 percent stake and LSE shareholders 45.6 percent.

“The potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group”, the companies said in a statement.

Under the terms of the Potential Merger, LSE shareholders would be entitled to receive 0.4421 new shares in exchange for each LSE share and Deutsche Boerse shareholders would be entitled to receive one new share in exchange for each Deutsche Boerse share. The previous efforts in 2000 and 2004 collapsed.

Robey has had a stellar 12 months and is advising on a series of multi-billion pound mergers, including the tie-up between SAB Miller and Anheuser Busch Inbev. Deutsche Boerse was not immediately available for comment.

“They have a large business in Continental Europe and a dynamic capital market on the Anglo-Saxon side”. Each company would have an equal number of seats on the board of directors.

It added that “complementary growth strategies, products, services and geographic footprint” would allow the enlarged group to offer a “full service offering to customers on a global basis”.

A new holding company would be set up with shares exchanged in differing proportions for those in the two merging companies, with Deutsche Boerse investors getting more per share and controlling a 55 per cent majority interest.

Deutsche Boerse is listed on the Dax in Germany, having listed on the stock exchange in February 2001.