The London Stock Exchange and Deutsche Boerse last night confirmed receipt of a statement of objections to their merger from the Brussels regulator.
The European Commission is understood to have narrowed its focus on to concerns around derivatives clearing.
In anticipation of these concerns, the London Stock Exchange said in September that it was exploring the sale of its French clearing arm, LCH SA.
The companies said yesterday that the London Stock Exchange is “making good progress” with the sale.
And City A.M. understands people working on the deal are keen to reach an agreement before Christmas.
Pan-European exchange group Euronext is understood to be the frontrunner, but US companies including Nasdaq and CME Group have also been linked with LCH SA.
The European Commission’s statement of objections does not take into account the sale of LCH SA, and the regulatory body will only consider this once a deal has been announced.
The exchanges said today in a joint statement:
Today, as part of the ongoing EU merger regulation process, the London Stock Exchange Group and Deutsche Boerse confirm that they have received a statement of objections from the European Commission in relation to the proposed merger, reflecting a narrower scope of issues.
The London Stock Exchange Group and Deutsche Boerse look forward to continuing to constructively engage with the European Commission and responding to any concerns raised.
Despite the European Commission narrowing its focus of concern, and therefore dropping other areas identified as preliminary issues, analysts retain doubts that the £21bn deal will complete.
Numis analyst Jonathan Goslin told City A.M. he gives the deal a 40 per cent chance of winning European Commission approval.
It then needs to win support from the State of Hesse, where Deutsche Boerse is based, which could prove an even larger hurdle.