Deutsche Bö rse Braced for Regulatory Scrutiny Over LSE Deal
May 31 2016 - 7:10AM
Dow Jones News
FRANKFURT—The chief executive of Deutsche Bö rse AG said his
planned merger with the London Stock Exchange Group PLC wouldn't
close before the first quarter of next year because of intense
regulatory scrutiny and that U.S. rivals could potentially still
torpedo the deal to create Europe's biggest stock-market
operator.
"We don't expect the deal to close before next year's first
quarter because regulators have to give their OK following
shareholder approval," Carsten Kengeter told journalists in
Frankfurt Monday.
Mr. Kengeter, who is poised to become chief executive of the
combined group, also criticized the French government, which he
said had a vested interest in undermining the deal. He noted that
the French state holds a 6% stake in Euronext NV, a rival to
Deutsche Bö rse and LSE Group.
His comments came in response to statements by French Finance
Minister Michel Sapin and the head of the country's central bank,
Franç ois Villeroy de Galhau, who earlier Monday raised concerns
about the tie-up of Deutsche Bö rse and LSE.
Mr. Sapin said such a move risked curtailing competition and
increasing market risk. He reiterated a call for European
authorities and other local supervisors to scrutinize the
British-German deal.
"We've been in a process of decreasing risk," Mr. Sapin said.
"If there is too much concentration, risks would increase."
Mr. Villeroy de Galhau said the creation of a large stock
clearing house "could create an operator that is too big to
fail."
Mr. Kengeter said Deutsche Bö rse and LSE would keep their
clearing houses separate but that customers and financial stability
could still benefit.
He also said that U.S. competitors such as Intercontinental
Exchange Inc. and CME Group Inc. could potentially bid for LSE or
Deutsche Bö rse. ICE in March said it was considering a bid for LSE
to rival Deutsche Bö rse, but said earlier this month that it would
not place a bid.
Mr. Kengeter said ICE could potentially make a new approach for
the LSE in November, when a standstill period ends. He speculated
that CME might also be interested in bidding for Deutsche Bö rse
should its LSE merger fall apart.
Write to Eyk Henning at eyk.henning@wsj.com
(END) Dow Jones Newswires
May 31, 2016 06:55 ET (10:55 GMT)
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