The London Stock Exchange (LSE) and Deutsche Boerse will create one of the largest exchanges in the world through their so-called “merger of equals” announced yesterday.
The merger will create an exchange with:
• €5.2 trillion of trading volume in European equities, based on 2015 figures
• 3,200 listed companies
• a €7.1 trillion market-cap for its listed companies
• $506 billion (€456 billion) of assets linked to its indices through exchange-traded funds
• €450 million of annual costs savings
LSE shareholders will own 45.6% of the new holding company, and Deutsche Boerse shareholders will have 54.4%. The new company will have a combined value of around £21 billion (€26.6 billion).
The merged company will retain offices in London and Frankfurt. A newly created holding company, UK TopCo, will be incorporated in the UK. Current LSE chairman Donald Brydon will become chairman of UK TopCo, and Deutsche Boerse chief executive, Carsten Kengeter, will become chief executive.
Earlier this month, Intercontinental Exchange (ICE), which owns the New York Stock Exchange, said it was considering making an offer for the LSE. It is unknown whether ICE will make a counter-offer, or hostile bid.
The deal is still subject to regulatory approval but is expected to complete by the end of 2016.
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