Europe left exposed by demise of Anglo-German exchange merger
The European Union could be left with no exchange big enough to compete with U.S. rivals and no trading link into Britain if it allows the London Stock Exchange (LSE.L) and Deutsche Boerse (DB1Gn.DE) merger to die.
Although the Anglo-German tie-up is awaiting formal EU regulatory approval, the LSE said on Sunday it would not meet an extra condition from Brussels, effectively pulling the plug on the 29 billion euro ($30.7 billion) deal.
For exchanges in the EU, that means a vision of creating a major trading house capable of competing with U.S. giants like InterContinentalExchange (ICE.N), Nasdaq (NDAQ.O) and CME CME.N or Asia’s growing exchanges is over for now.
“Politics is ultimately going to get in the way of further movement on European financial markets,” Rebecca Healey, head of market structure and strategy in Europe for Liquidnet, a trading platform, said on Tuesday.
“Ultimately, national exchanges are a protected species.”
Deutsche Boerse Chief Executive Carsten Kengeter had warned that a failure to complete the LSE deal would weaken Frankfurt, Germany’s main financial center, robbing it of a “bridge” to London, Europe’s only global money hub.
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