On March 29, the European Commission issued a statement prohibiting the proposed merger between Deutsche Börse and London Stock Exchange Group. The Commission concluded that the merger would have created a de facto monopoly in the clearing of fixed income instruments.
“The merger between Deutsche Börse and the London Stock Exchange would have significantly reduced competition by creating a de facto monopoly in the crucial area of clearing of fixed income instruments. As the parties failed to offer the remedies required to address our competition concerns, the Commission has decided to prohibit the merger,” said Commissioner Margrethe Vestager, who is in charge of competition policy.
LSE had proposed divesting LCH.Clearnet SA, its Paris-based clearinghouse, to remedy the Commission’s concerns. While the EC concluded that this divestment would have resolved the concerns relating to single stock equity derivatives, it said the divestment would not have been effective to remedy the impact on fixed income clearing.
“Deutsche Börse is well-positioned on a stand-alone basis to compete at a global level with other market infrastructure players,” Carsten Kengeter, CEO of Deutsche Börse, said in a statement. “We will continue to pursue our growth strategy, to strengthen our innovation capabilities and to even better serve market and customer needs,” he said.
