Deutsche Boerse AG (DB1) asked a European Union court to overturn a ban on its planned merger with NYSE Euronext, saying regulators made errors when reviewing the deal that would have created the world’s biggest exchange.
Regulators “failed to properly assess” offers made by the companies to eliminate antitrust concerns and wrongly ruled that the two exchanges’ rivalry limits fees for customers, Deutsche Boerse argued in a filing at the EU’s General Court in Luxembourg published in the EU’s Official Journal on June 16. NYSE isn’t a party to the appeal and said in March that it was focused on its strategy as a standalone company.
The European Commission blocked the $9.5 billion deal in February because it would have led to a “near monopoly” in European exchange-traded derivatives. The acquisition of NYSE Euronext (NYX) would have put more than 90 percent of Europe’s exchange-traded derivatives market and about 30 percent of stock trading in the hands of one company.
“The commission inaccurately accepted only some of the efficiencies as verifiable, merger-specific and likely to benefit customers, and incorrectly claimed that they were insufficient to counteract the competitive effects of the merger,” Deutsche Boerse said in the filing.
The EU tribunal can cancel regulators’ decision or ask them to reexamine the deal if it backs any of the Frankfurt-based exchange’s claims. It was the fourth time the commission had blocked a deal since it overhauled the bloc’s merger rules in 2004. Appealing a merger decision is an attack on the commission’s legal reasoning and doesn’t say anything about whether companies intend to resurrect a deal.
Deutsche Boerse also said the EU used “incorrect evidence” to reject the companies’ offer to sell NYSE Euronext’s BClear single equity derivatives business. Regulators were wrong to claim there was a symbiotic relationship between single equity and equity index derivatives, the Frankfurt-based company said in the court filing.
Antitrust concerns have thwarted other exchange tie-ups. Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Inc. (ICE) abandoned an unsolicited bid for NYSE Euronext after the U.S. Justice Department threatened to sue. Singapore Exchange Ltd.’s (SGX) $8.8 billion bid for ASX Ltd. collapsed after Australian Treasurer Wayne Swan said the deal wasn’t in the national interest.
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