The London Stock Exchange Group’s $27bn purchase of Refinitiv has reportedly already come under intense scrutiny in Brussels, raising the prospect that EU regulators will initiate a much longer investigation into the deal than had been expected.
The two companies are yet to formally notify competition regulators of the deal, which would trigger the review of the bourse’s acquisition of the financial data provider, which was first announced in August last year.
The LSE and Refinitiv had planned to do so by the start of February, but have delayed after the deal came under unexpected scrutiny in the so-called pre-notification phase, the Financial Times reported.
The proposed tie-up, which has been welcomed by LSE shareholders, was not expected to face significant regulatory hurdles, and the companies had indicated it would complete by the second half of this year.
But the LSE and Refinitiv are now gearing up for a protracted legal battle over the deal, according to the FT.
A lengthy pre-notification period often indicates that regulators will launch a lengthy probe faced by only a minority of the deals, and raises the risk that they could intervene to block the acquisition.
“The deal is likely to go into a lengthier probe and we are not on the clock yet,” one person involved in the discussions told the FT. “It could spill into next year.”
Advisers to the LSE are frustrated by the number of questions being asked by regulators at this early stage, a source told the paper, adding that the process was making their lives “too miserable”.
LSE shares fell as much as 5.82 per cent in morning trading following news the deal could be facing increased scrutiny.
Both LSE and Refinitiv declined to comment.