London Stock Exchange agrees merger with Deutsche Börse
Landmark merger looks to be going ahead after several misfires, being described as “highly complementary” for both parties.
The London Stock Exchange (LSE) and Deutsche Börse have agreed on an “industry-defining merger”, which will bring together the leading global financial centre of London with the hub of Europe’s largest economy in Frankfurt.
Based on the assumption that the merger is completed in line with its current terms, the ownership structure of the new company will see Deutsche Börse shareholders owning 54.4% of UK TopCo, with the remaining 45.6% owned by LSE shareholders on a fully diluted bases.
The deal, which was first announced in February, will create a company with a combined value of £21bn.
“Strengthening the link between the two leading financial cities of Europe, Frankfurt and London, and building a network across Europe with Luxemburg, Paris and Milan will strengthen European capital markets,” said Carsten Kengeter, Chief Executive Officer of Deutsche Börse.
On the merger's completion, Mr Kengeter would move to become the company’s chief executive.
Donald Brydon, Chairman of the Royal Mail, Sage Group and the Medical Research Council will become Chairman and current Deutsche Börse Chariman Joachim Faber will take on the roles of Deputy Chairman and Senior Independent Director.
Xavier Rolet, who will step down as LSE Chief Executive Officer when the merger is completed, said: “We are creating an industry defining combination which will be a leading global market infrastructure business.”
As ICAS reported earlier this month this is the third time that LSE and Deutsche Boerse have talked about a deal, the first was in 2000, then again in 2004-5.