Michael Sercan Daventry
March 16, 2016•Update: March 19, 2016
LONDON
Britain and Germany’s largest stock companies are to merge after striking a £21 billion ($29.6bn) deal that will create one of the world’s largest exchanges.
Deutsche Borse and the London Stock Exchange (LSE) – the largest exchanges in Europe by market capitalization – said the new combined company would be based in London and that the deal contained a clause on Britain remaining an EU member.
The German company’s Chief Executive Carsten Kengeter and LSE Chairman Donald Brydon would retain their roles in the new company.
LSE Chief Executive Xavier Rolet, who would leave his role if the agreement goes ahead, said: “We are creating an industry-defining combination which will be a leading global market infrastructure business, very well positioned to create new benefits and efficiencies for our customers and increase value for our shareholders”.
But the deal appeared to be conditional on Britain voting to remain an EU member in its June 23 referendum.
The two exchanges said they had established a “referendum committee” that would consider the ramifications of a vote for the U.K. to leave the 28-country bloc.
Deutsche Borse boss Carsten Kengeter said: “Strengthening the link between the two leading financial cities of Europe, Frankfurt and London, and building a network across Europe with Luxemburg, Paris and Milan will strengthen European capital markets.
“It is the logical evolution for our companies in a fundamentally changing industry.”
If approved by regulators, the new company would become a huge force in global trading. At the end of 2015, the two exchanges were trading a combined 5.2 trillion euros ($5.76 trillion) in equities and had over 3,200 on their markets.
The combined group would also include the Milan stock exchange, which was acquired by the LSE in 2007.
