London Stock Exchange (LSE) and Deutsche Boerse timeline: How "merger of equals" stumbled over Brexit, shareholder votes and criminal investigations before European Commission veto

 
William Turvill
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Inside The London Stock Exchange
The London Stock Exchange and Deutsche Boerse agreed a £21bn merger in March 2016 (Source: Getty)

The London Stock Exchange-Deutsche Boerse merger was blocked by the European Commission today, more than 13 months after talks between the exchanges emerged. Here is the story of how the deal stumbled past the Brexit vote, shareholder votes, rival efforts to disrupt and political opposition before being blocked by the European Commission...

23 February 2016: It emerges that the LSE and Deutsche Boerse are in merger talks… again. Third time lucky?

26 February: LSE reveals chief executive Xavier Rolet will stand down after the deal completes.

16 March: LSE and Deutsche Boerse agree on a “merger of equals”. Deutsche Boerse shareholders get 54.4 per cent of stock; Deutsche Boerse chief executive takes charge of group; London gets the headquarters.

5 April: In City A.M. interview, Rolet fires warning shot at Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, which is threatening to gatecrash the deal with an LSE takeover offer.

Read more: The inside story of how the LSE's mega-merger was suddenly derailed

12 April: Politicians in Germany and the UK speak out against the deal. Both sides appear unhappy with the terms of the “merger of equals”.

30 April: Deutsche Boerse gets a ticking off from the Takeover Panel over comments made about the merger. The LSE had also been forced to clarify comments made in the press.

4 May: ICE rules out a bid for the LSE, clearing the way for the merger.

11 May: Chancellor George Osborne confirms he does not believe the LSE-DB merger is “1944 by stealth”.

20 May: The French government expresses concern over the deal. Governments in Belgium, Portugal and the Netherlands follow suit.

1 June: LSE and DB reveal the merger could lead to 1,250 job losses. Deutsche Boerse’s tells City A.M. the merger is Europe’s “last chance”. He also commits to the London headquarters of the combined exchange.

24 June: Exchanges say they are “fully committed” to the deal, following the UK’s Brexit vote.

4 July: LSE shareholders happily wave through the deal.

5 July: Sources close to the deal tell City A.M. London may need to lose, or share, the merged stock exchange headquarters.

6 July: City A.M. reveals German politicians have been told that the merged exchange will have an EU headquarters.

26 July: After a drawn out, surprisingly tough, process, Deutsche Boerse wins shareholder approval for merger.

25 August: Exchanges formally begin process of winning EU approval for deal.

21 September: Euronext says the merger would create a “virtual monopoly”.

28 September: European Commission opens an in-depth probe into the deal. Pre-empting concerns over clearing, the LSE puts its French clearing business LCH SA up for sale.

23 October: City A.M. reveals JP Morgan Cazenove is overseeing the sale of LCH SA, with Euronext leading the pack.

12 December: LSE and DB reveal Brussels is to focus on derivatives clearing concerns.

20 December: LSE enters exclusive talks with Euronext over the sale of LCH SA.

3 January 2017: Euronext agrees €510m deal for LCH SA. Euronext chief executive tells City A.M. his company is in a win-win situation: either he gets LCH SA or the LSE-DB deal falls through.

16 January: LSE hits back at a DB-commissioned report claiming the UK will lose out to Germany after the merger completes.

Read more: MTS and the London Stock Exchange deal: How a straw broke the camel's back

31 January: DB boss Carsten Kengeter goes on the charm offensive in London, saying he wants the combined group to have an Anglo-Saxon spirit. Hours later, authorities in the German region of Hesse, where Deutsche Boerse is based, launch a criminal probe into Kengeter over alleged insider trading.

7 February: DB board gives its full backing to Kengeter.

8 February: Stock exchanges appear confident European Commission will approve the deal, confirming LCH SA will be the only remedy they will submit.

21 February: UK government indicates it is unlikely to stand in the way of the deal.

23 February: City grandees and politicians urge Prime Minister Theresa May to put a halt to the deal.

27 February: In a late Sunday night statement, LSE reveals it expects the European Commission to block the deal because it is unwilling to sell its Italian trading business MTS. Read more here and here.

29 March: European Commission formally blocks the deal, saying it would create a “de facto monopoly”.

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