UK and German exchanges have worked more than a year to alleviate regulatory concerns about their merger, which is supported by their respective shareholders. The LSE has now effectively pulled the plug, blaming the EC's "disproportionate" demand for a sale of its controlling stake in Italian bond-trading unit MTS Spa. Such a move, the LSE implies, would have irked the Italians so may not really be possible. Therefore, the British company isn't going to play ball.
Brussels still needs to officially block the merger, but it is difficult to see a way out of this situation. But the LSE's arguments are strange. One obvious candidate for MTS is Euronext NV, which already runs another transaction to eliminate the LSE. Maybe Italy would block such a deal. But surely alternative buyer of MTS might be found.
The structure of the current deal with holding company based in the UK, certainly fits the Bank of England, but it would be difficult for Hesse to swallow, especially with the upcoming Brexit.
European markets are now a large fragmented mess, especially compared with the US. The head of LSE would leave after the merger, which would allow Carsten Kengeter by Deutsche Boerse, to move the show. It will be difficult for Rolet, to convince shareholders that is one that will protect the new solo strategy. He needs to complete this transaction as soon as possible.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.