Deutsche Boerse Fights NYSE Bid Ban to Protect Future Deals

Deutsche Boerse AG is fighting for its right to make future acquisitions after the European Union blocked its merger with NYSE Euronext, which would have created the world’s biggest exchange, lawyers told an EU appeals court.

The European Commission’s 2012 decision to veto the deal was “wrong”, Deutsche Boerse lawyers said at a hearing at the EU’s General Court today in Luxembourg.

“We are fighting today the negative precedent set by the European Commission,” Jurgen Beninca, a lawyer for Deutsche Boerse, told the EU’s second-highest court.

The commission blocked the $9.5 billion deal in February 2012, rejecting the companies’ arguments that derivatives traded over the counter competed with those traded on exchanges. The merger would have led to a “near monopoly” in European exchange-traded derivatives, according to the regulator.

The EU tribunal can cancel regulators’ decision or ask them to re-examine the deal if it backs any of the Frankfurt-based exchange’s claims. 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.

While there are no plans to do so, it’s still “a possibility” that Deutsche Boerse could buy NYSE Euronext, Beninca said.

Carved Out

A year after Deutsche Boerse’s acquisition was blocked, the commission cleared IntercontinentalExchange Inc.’s bid for NYSE Euronext.

Despite that acquisition, NYSE Euronext’s legal entity hasn’t changed and could be carved out, said Christian Zschocke, another lawyer for Deutsche Boerse. “Conceptually the same deal could happen again.”

The case lacks an underlying reason “because it is accepted that the transaction can no longer go ahead,” said Nicholas Khan, a lawyer for the commission.

Still, the EU reviews each deal on its own merits even if a company seeks approval for a transaction that has already been turned down, Khan said.

“There is no question of dusting down the old decision and adopting it again.”

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