Deutsche Boerse Secures 55% Shareholder Backing for LSE Deal

  • The German exchange has until July 26 to win acceptance
  • Deutsche Boerse has already lowered threshold from 75 percent

Deutsche Boerse AG has yet to secure shareholder acceptance for its 10.6 billion-pound ($13.9 billion) takeover of London Stock Exchange Group Plc, although it edged closer with 55.5 percent of investors giving it the go ahead.

That’s up from the 53 percent support the deal had at its last update, the company said in a statement on its website. The German exchange has less than a week, until July 26, to reach the 60 percent level needed for the transaction to proceed. Deutsche Boerse Chief Financial Officer Gregor Pottmeyer said it’s common for investors to wait until the final 48 hours to tender their shares.

“Our proposed merger with LSEG has won the broad support of our shareholders and we are very confident,” Pottmeyer said in a statement.

Deutsche Boerse lowered the level of acceptance needed to 60 percent from 75 percent on July 11, arguing that the change was necessary to accommodate passive investors. Index investors own about 15 percent of the company. The exchange operator also gave shareholders an extra two weeks to tender their shares.

The deal still needs to be approved by the European Commission and national regulators. In written submissions to the commission, Belgium and Portugal have said they oppose the tie-up because they believe it would reduce competition. In both countries, the national stock exchange is run by Euronext NV, a smaller rival to Deutsche Boerse and LSEG.

The companies’ effort to create a European champion for exchange trading has faced many challenges.

German authorities have balked at the prospect of their stock exchange’s holding company having its headquarters in London. The City will be outside the European Union once the U.K. leaves the bloc. French and German leaders, meanwhile, are jostling to take euro-denominated clearing away from Britain. LSE’s LCH unit is the world’s largest clearer of interest-rate swaps and clearing is one of the key rationales for the tie-up.

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