The companies anticipate that Deutsche Börse shareholders would hold 54.4% and LSE shareholders would hold 45.6% of the issued share capital of the combined group.
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The London Stock Exchange and Germany’s Deutsche Börse announced their plans to merge on Tuesday, following jump in the LSE group’s share price. Shares in both companies soared on the news, with the LSE rising almost 17% and Deutsche Börse up more than 7%. Under the terms of the potential merger, the shareholders of London Stock Exchange would be entitled to receive 0.4421 of a new share in the combined entity in exchange for each LSE share held.
The LSE said it would be a “merger of equals”, forming an enlarged group that would rival the likes of CME Group and Intercontinental Exchange in the USA and Hong Kong Exchanges and Clearing, which is the world’s largest exchanges group.
London Stock Exchange Group, which owns the London and Milan exchanges, said Tuesday, February 23, that it was in merger talks with Deutsche Boerse about creating a pan-European titan, AFP reports. The previous efforts in 2000 and 2004 collapsed.
“The potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group”, the LSE said.
The Potential Merger would be structured as an all-share merger of equals under a new holding company.
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“Business needs unrestricted access to the European market of 500 million people in order to continue to grow, invest and create jobs”. Once LSE put out a statement, its share price surged further and was up nearly 20 percent in early afternoon deals.
