They said in a news release Wednesday that they will set up a U.K.-based holding company that will acquire the London Stock Exchange Group PLC and Frankfurt-based Deutsche Boerse AG.
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It’s been looming for a while, but it looks like the deal between the London Stock Exchange (LSE) and its German counterpart Deutsche Börse is finally happening.
And in a clear effort to win over Europe’s politicians to the benefits of a dominant pan-European exchange, Deutsche Boerse Chief Executive Carsten Kengeter said it would enable Europe to enhance its capital markets.
A statement from the two exchanges said the “combination of London, Frankfurt and Milan will provide a platform for financing and promoting economic growth of European companies and be an attractive offering to Asian and USA companies looking to access investors and capital”.
The deal makes sense even if British voters decide to leave the European Union in a referendum June 23, the two sides said, but conceded there are risks to its business from a potential British exit.
The new firm, which will be domiciled in Britain, with a primary listing in the blue-chip FTSE 100, will also have a home on the Frankfurt Stock Exchange and have corporate headquarters in both cities.
The merger will result in the London Stock Exchange shareholders owning 45.6% of United Kingdom topco and Deutsche Boerse shareholders owning 54.4%..
As already proposed at the end of February, Deutsche Boerse said that the combined group would be managed by a “unitary board of the United Kingdom holding company composed of equal numbers of LSEG and Deutsche Boerse directors”.
“As a Combined Group we will create a European player that will compete on a global basis”.
Under terms of merger, LSEG and DBAG have agreed that LSEG shareholders will be entitled to receive dividends of 25.2 pence per LSEG share for the six-month period ended December 31, 2015.
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On stepping down Rolet will be retained as an adviser to the chairman and deputy chairman to help with a smooth handover – a post he is likely to hold for up to a year.
