Shares soar amid LSE Deutsche Boerse merger talks

Deutsche Boerse and London Stock Exchange (LSE) are in talks for a possible merger, a move that could establish one of the biggest exchange companies in the world.

Stock markets responded positively to the news, which was first reported by Reuters, with LSE shares soaring by nearly 14% and Deutsche Boerse rising by more than 7%.

LSE confirmed that both groups had reached the stage of “detailed discussions”, which foresee a merger of equals” under a new holding company.

According to LSE, under the potential terms of the mergers, its shareholders would be etitled to 0.4421 new shares in exchange for each LSE share, while Deutsche Boerse shareholders would be entitled to receive one new share in exchange for each Deutsche Boerse share held.

Moreover, Deutsche Boerse shareholders would be expected to hold roughly 54% of the new holding company, with London Stock Exchange Group shareholders holding the remainder, the deal would therefore constitute a reverse takeover according to UK listing rules.

The agreement would follow a series of mergers, with Deutsche Boerse merging with NYSE Euronext in 2011, LSE also merged with Borsa Italiana in 2007.

The transaction is still subject to regulatory approval as well as to the approval of the boards and shareholders of both parties, Deutsche Boerse highlighted.

Under the UK City Code on Takeovers and Mergers, the deadline for either the new holding company or Deutsche Boerse as majority shareholder to announce a firm intention to make an offer would be 22 March 2016. If the party does not make an offer within the next month, it will not be able to make an offer for the next six months.

Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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