09 February 2006

Competition Commission published draft undertakings on LSE mergers

The Competition Commission published draft undertakings, which, if finalized, will allow either Deutsche Borse or Euronext to acquire London Stock Exchange subject to specified conditions. The undertakings give effect to the findings of the CC's final report on the proposed mergers, published in November. The CC found that the proposed acquisition of LSE by either DBAG or Euronext was likely to give rise to a substantial lessening of competition. This is because either merger could make it more difficult for other exchanges to compete with LSE in trading UK equities due to both bidders' direct control or influence over the provision of clearing services. However, the CC decided that both parties could acquire LSE if they were able to make certain commitments regarding LSE's clearing services provider.

As reported in an FT article earlier this week, Euronext said talks about a merger between it and Deutsche Börse have fallen apart because of differences over key elements including legal structure, domicile and the ownership and management of technology.

However, it held out the possibility of resuming talks about a merger if those key issues could be resolved. 'Euronext as always remains open to further discussions regarding consolidation in the sector,' the company said.

Press release

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