By Eyk Henning 

FRANKFURT -- The vast majority of shareholders in London Stock Exchange Group PLC have indicated they are voting in favor of the roughly $30 billion merger with Deutsche Börse AG, people familiar with the matter said.

Shareholders controlling well over 75% of LSE shares have instructed proxy advisers to vote in favor of the deal at a special shareholder meeting on Monday, these people said.

LSE shareholder approval has been widely expected and would be in line with what two large proxy advisers recommended. LSE declined to comment.

Analysts and investors say that following Britain's vote last week to leave the European Union, LSE now has more to gain from a tie-up because it would allow the exchange to retain a foothold in the bloc.

Assent from LSE investors would shift focus to Deutsche Börse's ongoing tender offer, which ends on July 12. More than 75% of the German company's shares must be tendered for the transaction to go ahead.

Several large Deutsche Börse investors have told The Wall Street Journal they had not yet decided whether to tender their shares.

German politicians and the country's financial watchdog, BaFin, have said recently they would oppose the merger under its proposed structure, which foresees both exchanges being owned by a London-based holding company. The German officials said basing the merged company in London, which will be outside the EU and its regulatory regime, would be unacceptable.

"It is hard to imagine" that the most important exchange operator in the eurozone would be steered from a headquarters outside the EU, BaFin President Felix Hufeld said Tuesday.

To save the deal, LSE would probably need to agree to relocate to the EU, people close to the transaction said.

Should the deal fail, Intercontinental Exchange Inc. could make another approach to buy LSE. The owner of the NYSE in May said it wouldn't bid for LSE, but said it could come back should the European tie-up fall through.

Deutsche Börse's chief executive also speculated last month that Deutsche Börse could become a target for CME Group Inc., another big U.S. rival. Such a scenario would leave Europe's largest stock operators in the hands of U.S. bellwethers.

The tender offer for Deutsche Börse shares also faces the intricacies of German takeover laws. At least 14% of the exchange group's capital is held by index funds, according to calculations by the Journal. Those investors often tender only after an offer is complete because of internal rules.

--Madeleine Nissen in Frankfurt and Tim Cave in London contributed to this article.

Write to Eyk Henning at eyk.henning@wsj.com

(END) Dow Jones Newswires

July 01, 2016 02:47 ET (06:47 GMT)