Deutsche Boerse and London Stock Exchange say they have reached a merger agreement and see potential cost savings of 450 million euros ($499 million) per year for the combined company. Hayley Platt reports
Deutsche Boerse is hoping it'll be third time lucky. 16 years after it first attempted to take over the London Stock Exchange a $30 billion merger deal has been agreed. It could potentially save 450 million euros a year and create a European trading powerhouse to compete with the U.S. SOUNDBITE (English) CIBC, HEAD OF G10 FX STRATEGY, JEREMY STRETCH, SAYING: "It is a process which is trying to move towards beyond just a merger based on synergies or cost reductions but very much the case of trying to meet the challenges of the other big global market exchanges and certainly in the context of this market, big is definitely better." Donald Brydon, the LSE's current chairman, will keep that post in the new company. While Deutsche Boerse's chief Carsten Kengeter will be CEO. The new board will have an equal number of directors from both sides. But Deutsche Boerse shareholders will get 54 percent of the new company - slightly more than LSE investors. SOUNDBITE (English) CIBC, HEAD OF G10 FX STRATEGY, JEREMY STRETCH, SAYING: "It isn't quite the merger of equals that is being discussed and of course as with all things when you have two CEO's there can only be one new CEO of the new company and so clearly that is potentially seeing the LSE losing out in that context." The LSE's current chief will retire "if" the deal goes ahead. And there are still some "ifs." It has to get past competition regulators. It may prompt a bidding war if the New York Stock Exchange makes an offer. And there are questions about what might happen if Britain votes to leave the European Union.