A senior Deutsche Boerse exec has described the company's impending merger with the London Stock Exchange as "the last chance for Europe", after the two giants revealed details of their proposed £21bn tie-up.
Jeffrey Tessler told City A.M. that the deal would create a “global powerhouse” in Europe with the power to stimulate the continent's struggling levels of economic growth.
He was speaking after the stock exchanges revealed their merger could lead to 1,250 job losses as they target extra annual savings of €250m (£194m). These are in addition to previous annual savings announced totalling €450m.
“Europe’s at a crossroads right now in a number of different respects, and certainly the one in front of us right now is 23 June, Brexit. But before Brexit everything was not fine in Europe,” he said, in an interview to be published in full at a later date.
“To [stimulate growth in Europe], you need a capital market that’s vibrant. And at the base of a capital market would be a capital markets infrastructure. It’s hard to have a capital market without a capital markets infrastructure.
“And so what we have today are a number of good players in the market. But when I think about the future, and this is what gets me kind of excited, the idea of Deutsche Boerse and LSE becoming a global powerhouse, located in Europe, is exactly what Europe needs right now to stimulate growth.”
He added: “If it doesn’t happen, and let’s say the infrastructure is owned by a US player, they don’t have the same interest in developing [it]. We have a home-grown interest in developing [it].”
In the event that it does fail, though, Tessler echoed the words of Deutsche Boerse chief executive Carsten Kengeter, who said the company will be looking to make deals elsewhere.
Tessler said: “Yes, Deutsche Boerse could go somewhere else and will be successful, but this is to me the last chance for Europe.”
Details of the job losses and savings were published in the stock exchanges’ prospectus document for the merger, which shareholders will be asked to approve in July.
Tessler described the deal as the “perfect deal at the perfect time” and said Deutsche Boerse is “highly confident” it will go through, winning shareholder and regulatory approval.
He spoke out against a so-called Brexit but insisted the deal would still “make sense”.
The prospectus document noted that the UK’s membership of the EU is “not a condition of the merger”, although a referendum committee has been set up and will be “tasked with reviewing the potential impact” of a Leave vote.