Bloomberg backs merger of Deutsche Boerse and NYSE

City A.M. Reporter
NEW York Mayor Michael Bloomberg yesterday gave his full-throated support to Deutsche Boerse’s planned takeover of NYSE Euronext.

He said of the proposed deal: “It’s going to give us access to Europe, and Europe access to the US in a way our competitors like London will not have.”

However, the deal is likely to face intense scrutiny from German regulators and European anti-trust authorities, potentially putting the blockbuster exchange tie-up in peril.

It could also face hurdles in Washington as US lawmakers and regulators consider whether they are prepared to allow such an iconic institution to fall into foreign hands, although early criticism was muted.

The companies said on Wednesday they are in “advanced talks” to join forces and create an exchange operator with unprecedented global reach and -- most worrisome for regulators – a dominant grip on Europe’s lucrative derivatives markets.

While executives from Frankfurt and New York have hatched a tentative agreement, there are still obstacles that must be overcome -- hurdles that have scuppered attempts to combine Deutsche Boerse with Paris-based Euronext. “These key questions are not yet resolved,” a senior German financial source said yesterday.