Deutsche Boerse Workers Demand Headquarters Change in LSE Deal

  • ‘Works council’ urges Frankfurt base in letter to shareholders
  • London move would harm Frankfurt financial hub, economy: group

A group representing Deutsche Boerse AG’s workers has demanded the company formed by the proposed takeover of London Stock Exchange Group Plc be based in Frankfurt instead of London, according to a letter to staff and shareholders.

The June 2 letter from Deutsche Boerse’s so-called works council, which was obtained by Bloomberg, said Frankfurt as a finance hub could be "severely damaged in its development, with negative consequences for the economy" if the company moved. The plan to base the new merged company in London has been an issue for politicians and businesses in Germany, who have voiced objections that a U.K. base would damage Germany’s financial capital. 

The workers demanded the Frankfurt headquarters be secure for at least 20 years, along with certain employee guarantees related to dismissal, retirement and severance. The companies said last week that the proposed deal could result in about 1,250 job cuts.

Chief Executive Officer Carsten Kengeter has previously said that Frankfurt would suffer if the deal with LSE didn’t go through, arguing that the merger would create a "liquidity bridge" between Frankfurt and London. Deutsche Boerse’s board on Tuesday recommended accepting the deal.

"We all share the same interests: We seek what’s best for Frankfurt," Deutsche Boerse spokeswoman Grit Beecken said in an e-mail.

LSE shareholders are set to vote on the merger on July 4, which is after the U.K. referendum on whether to remain in the European Union. The companies have said the merger will proceed regardless of the outcome of that June 23 vote. Deutsche Boerse shareholders have until July 12 to tender their shares.

The letter from Deutsche Boerse workers was previously reported by German magazine WirtschaftsWoche.

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