London Stock Exchange group revenue rises as deal talks with Deutsche Boerse continue

 
Jessica Morris
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Shares in the London Stock Exchange fell one per cent to 2,863p per share this morning, despite the company reporting gross profit rose 40 per cent in 2015.

The figures

The London Stock Exchange group's gross profit rose 40 per cent to £1.8bn in the year ended 31 December, from £1.3bn a year earlier.

This came as revenue increased 78 per cent to £2.3bn during this period, up from £1.3bn in 2014.

Revenue in its information and technology divisions rose 41 per cent and 22 per cent respectively. This helped offset declines in its capital markets and post trade services sectors.

Why it's interesting

Last month LSE revealed it was in merger talks with the Frankfurt-based exchange Deutsche Boerse – their third attempt to strike a deal in less than two decades.

Since then the the New Stock Exchange (NYSE) owner ICE confirmed it is also considering bidding for the group, leading to speculation that this could herald the start of a bidding war.

Reports suggest LSE could spin off the French division of LCH.Clearnet, and may also shift control of the firm's London-based interest rate derivatives business to German rival Eurex, in an effort to make a potential £20bn takeover by Deutsche Boerse.

"The combination of LSE and Deutsche Börse's complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis," the LSE said today.

"Discussions between the parties remain ongoing regarding the other terms and conditions of the potential merger," it added.

What the LSE said

""We have delivered underlying growth in each of our business areas and maintained good cost control. We have further strengthened the group through integrating recent acquisitions and developing innovative new products," Xavier Rolet, chief executive of the LSE, said.

"We have recently confirmed that we are in detailed discussions with Deutsche Börse regarding a potential merger of equals. This represents a compelling opportunity to strengthen each other in an industry-defining combination, by creating a global market infrastructure group with significant benefits for our customers and shareholders."

In short

The LSE was keen to reiterate the benefits of a tie-up with Deutsche Boerse, however it made no mention of a potential rival bid from ICE.

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