Stock markets merger looks doomed despite lobbying

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Stock markets merger looks doomed despite lobbying

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The merger of Germany’s Deutsche Boerse and the US-European stock exchanges NYSE Euronext looks set to be blocked.

EU Competition Commissioner Joaquin Almunia opposes it as the merged company would dominate

derivatives trading in Europe. He has said they would have to sell substantial parts of their operations to get approval.

NYSE Euronext’s boss Duncan Niederauer and Deutsche Boerse’s Reto Francioni have been lobbying in Brussels stressing the advantages.

Niederauer told euronews: “This is a great opportunity for Europe, it’s consistent with Europe’s ambitions to integrate the markets and bring them together, and also — more importantly — we are building a European-centric company. 70 percent of the revenue is in Europe, 80 percent of the board members are from Europe, incorporated in the Netherlands, employees from all 27 member states; this is a very, very good transaction for Europe.”

National competition regulators in the European Union — made up of an advisory committee of experts — have said they agree with Almunia.

All 27 EU commissioners are expected on vote on the matter at the start of February.

Almunia had asked that Deutsche Boerse sell off its Eurex derivatives arm or that NYSE Euronext dispose of Liffe, its London-based futures exchange, to get around competition issues. Both exchanges refused.

On Tuesday, Almunia said that competing exchanges are key to ensuring efficient and competitive markets for users.

“Exchanges are a crucial instrument for modern and efficient capital markets,” he said in a speech at an industry conference.

“Trading and post-trading activities, for cash or derivatives, are essential activities for our companies and investors to be competitive at the EU and global levels And for this reason, competition between exchanges is needed,” Almunia added.