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EU probes Frankfurt-London bourse merger

dpa logodpa 28/09/2016

The EU says a merger between Deutsche Boerse and the London Stock Exchange Group would create the largest European exchange operator.

The European Commission has launched a full-blown investigation into a proposed merger between the operators of the Frankfurt and London stock exchanges, after an initial inquiry generated competition concerns.

"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 Competition Commissioner Margrethe Vestager said in a statement on Wednesday.

The merger between Deutsche Boerse and the London Stock Exchange Group would create "by far the largest European exchange operator," according to the commission, the European Union's executive.

It now has until February 13 to rule on whether the fusion would hamper competition.

Its preliminary competition concerns included effects that the merger would have on clearing houses, derivatives, repurchasing agreements, German stocks and exchange traded products.

The two companies decided to proceed with the merger despite Britain's shock decision to leave the EU, but German financial officials have said they believe the deal could prove challenging with London as the headquarters of the combined exchange.

Valued at an estimated 20 billion pounds, the merger paves the way to bring Britain's FTSE 100, Germany's DAX and the Euro Stoxx 50 index under one roof.

The merged trading behemoth would rival the largest stock exchange groups in the world, including CME Group and the Hong Kong Stock Exchanges and Clearing.

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