An influential German minister has accused the London Stock Exchange of having “derailed” its Deutsche Boerse merger and attempted to “pass the buck to Brussels”.
Thomas Schaefer, the finance minister of the state of Hesse, where Deutsche Boerse is based, suggested the deal has seemingly broken down because the UK company was unwilling to reconsider the London headquarters of the combined group.
Schaefer was one of many politicians in Hesse who suggested the merger should not go ahead with a legal HQ in London rather than Frankfurt. This was significant because the state of Hesse had the power to block the deal.
“[The headquarters issue is] a point which I believe Deutsche Boerse has made quite clear when negotiating with their partners,” Schaefer told City A.M. “It seems, however, that so far, the parties involved in London were not willing or not able to re-evaluate their position.”
The European Commission has not finally decided yet. My impression is, however, that with their veto on the sale of the business in Italy, those involved in London have not only sought and found a face-saving way out of the deal but they are also able to pass the buck to Brussels.
Behind all this, the remaining issue is that of the legal headquarters of the merged company and the apparent reluctance to set aside national considerations for the economic and legal benefits of the most reasonable option.
The London Stock Exchange announced in late February that the European Commission was likely to block the deal after it “unexpectedly raised new concerns” over its majority stake in Italian bond trading platform MTS.
Several theories have circulated in recent weeks to explain this twist in the deal, including speculation that it may have been prompted due to opposition among German and French politicians.