01 February 2012

ドイツ取引所とNYSEユーロネクストの合併を否決した欧州委員会

Together, the two exchanges control more than 90 per cent of global trade in these products. The Commission's investigation showed that new competitors would be unlikely to enter the market successfully enough to pose a credible competitive threat to the merged company. The companies offered, in particular, to sell certain assets and to provide access to their clearinghouse for some categories of new contracts, but overall the commitments were inadequate to solve the identified competition concerns.

Commission Vice President in charge of competition policy, Joaquín Almunia, said: "The merger between Deutsche Börse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide. These markets are at the heart of the financial system and it is crucial for the whole European economy that they remain competitive. We tried to find a solution, but the remedies offered fell far short of resolving the concerns."

Eurex, operated by Deutsche Börse, and Liffe, operated by NYSE Euronext, are the two largest exchanges in the world for financial derivatives based on European underlyings. They compete head-to-head and are each other's closest competitors.

The proposed merger would have eliminated this global competition and created a quasi-monopoly in a number of asset classes, leading to significant harm to derivatives users and the European economy as a whole. With no effective competitive constraint left in the market, the benefits of price competition would be taken away from customers. There would also be less innovation in an area where a competitive market is vital for both SMEs and larger firms.

Summary of the Commission's conclusions

1. Relevant market

The Commission's analysis focused on the effects of the proposed merger on the markets for European financial derivatives (European interest rate, single stock equity and equity index derivatives) traded on exchanges. It did not identify any significant competition issues in other areas, such as cash listing, trading and post-trading activities.

Derivatives are financial contracts whose value is derived from an underlying asset (e.g. interest rate, equity). They are used by companies and financial institutions to manage financial risk. They are also used as an investment vehicle by retail and institutional investors – including mutual and pension funds investing on behalf of final consumers. See MEMO/12/60

Derivatives can be traded on exchanges or "over-the-counter" (OTC). Exchange-traded derivatives (ETDs) are highly liquid, relatively small size (around €100,000 per trade) and fully-standardised contracts in all their legal and economic terms and conditions. In contrast, OTC derivatives typically concern much bigger contracts (around €200,000,000 per trade) that allow customisation of their legal and economic terms and conditions. The investigation showed that ETDs and OTCs are generally not considered as substitutes by customers, since they use them for different purposes and in different circumstances. Some users of exchanges are also not authorised by their mandates to operate in the OTC market due to risk management considerations.

2. Near monopoly on European financial derivatives traded on exchanges

Eurex, operated by Deutsche Börse, and Liffe, operated by NYSE Euronext, are the two largest exchanges in the world for financial derivatives based on European underlyings. They compete head-to-head and are each other's closest competitors.

The proposed merger would have eliminated this global competition and created a quasi-monopoly in a number of asset classes, leading to significant harm to derivatives users and the European economy as a whole. With no effective competitive constraint left in the market, the benefits of price competition would be taken away from customers. There would also be less innovation in an area where a competitive market is vital for both SMEs and larger firms.

Although other companies, including the Chicago Mercantile Exchange (CME), provide similar services worldwide, they only do so marginally in the asset classes concerned. The investigation showed that due to the high barriers to entry, no other player would be able to develop trading in European financial derivatives on a sufficient scale to keep the market competitive.

Both Eurex and Liffe operate closed vertical silos linking their exchange to their own clearing house. The merger would have resulted in a single vertical silo, trading and clearing more than 90 per cent of the global market of European financial ETDs. It would have been difficult for a new player to enter the market because given the advantages of clearing similar contracts in a single clearing house, customers would have been reluctant to trade similar derivatives at another exchange. Therefore, the dynamics of the market would have reinforced the monopolistic position of the merger thus resulting in higher prices and lower incentives to innovate.

The two companies claimed that the merger would benefit customers through greater liquidity. However, it is unlikely that the merger would directly yield such benefits. Historically, competition - rather than exchange consolidation - has generated liquidity gains.

The companies also argued that customers would benefit from having to post less collateral for security. However, these benefits would be significantly less than argued by the merging companies and they could in part be achieved without the merger.

In any case, any efficiencies would not be substantial enough to outweigh the harm to customers caused by the merger. Because of the creation of a near monopoly, any benefits would also be unlikely to be fully passed on to customers.

3. Remedies proposed by the two companies

The two companies offered in particular to sell Liffe's European single stock equity derivatives products where these compete with Eurex. However, the divested assets would be too small and not diversified enough to be viable on a stand-alone basis.

In the commercially more significant area of European interest rate derivatives, the companies did not offer to sell overlapping derivatives products, but only offered to provide access to the merged company's clearing for some categories of "new" contracts. This was considered as insufficient, in particular because it did not extend to existing competing products. There were also fundamental concerns about the workability and the effectiveness of such an access remedy.

The Commission, therefore, had no alternative but to conclude that the concentration "would significantly impede effective competition in the internal market or a substantial part of it" (Art 2.3 of the Merger Regulation) and prohibited the transaction.

Previous steps

The merger was notified on 29 June 2011. On 4 August 2011, the Commission decided to launch an in-depth investigation. The deadline for a ruling was extended twice in order to assess the remedies. The parties were advised in a Statement of Objections sent in October 2011 that the merger as notified raised serious concerns and, in the absence of a sufficient remedy, might be prohibited.

Press release

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