By Natalia Drozdiak 

BRUSSELS--The European Union's antitrust regulator on Wednesday opened a full-blown investigation into the proposed merger of Deutsche Börse AG and London Stock Exchange Group PLC, citing concerns the deal would reduce competition in a number of financial markets.

The European Commission said it was concerned about the deal's impact in clearing, derivatives, repurchasing agreements, German stocks and exchange-traded products adding that the merger would "by far" create the largest European-exchange operator.

"Financial markets provide an essential function for the European economy. We must ensure that market participants continue to have access to financial market infrastructure on competitive terms," EU antitrust chief Margrethe Vestager said.

In-depth merger reviews by the EU are common in large, complex deals. The commission has until Feb. 13 next year to reach a decision, though the deadline could be extended.

In response to the commission's announcement, the LSE said it would try to head off some competition concerns by exploring the potential sale of LCH SA. It said any sale of the unit would be subject to the merger with Deutsche Börse going ahead.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

September 28, 2016 10:10 ET (14:10 GMT)