A planned £20bn merger between the London Stock Exchange and Deutsche Börse poses a threat to competition and the European economy, the French finance minister has claimed.
Michel Sapin said a combination of the two would make it too dominant and called on the European commission to intervene. He told Reuters: “I want to express the concern of the French government on this tie-up. We have doubts about the consequences this could have for the financing of the real economy in France and Europe.
“The merger of these two entities will result in a large group which could hold within it a majority of the tools that make our markets function efficiently. That poses a competition problem, and we want to make sure the European commission gets involved to avoid a situation where a dominant position arises.”
If the deal went ahead it would create a group similar in size to the Intercontinental Exchange (ICE) in the US, dwarfing smaller European competitors such as Euronext.
The London Stock Exchange and Deutsche Börse claim that a merger would allow them to cut costs by €450m (£350m). Deutsche Börse shareholders would own 54.4% of the new company with LSE shareholders owning the remainder.
It is the third time the two have attempted to merge. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, which was then rejected anyway.
The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005. After the potential deal was announced in February, ICE, the owner of the New York Stock Exchange, revealed it was considering making a rival offer for LSE.
