Retail Investor Group Warns of LSE-Deutsche Boerse ‘Dominance’

  • New European investor group lobbies to competition commission
  • Combined company would be dominant in indexes, ETFs, clearing

A European retail investor association is lobbying against Deutsche Boerse AG’s acquisition of London Stock Exchange Group Plc, arguing to officials in Brussels that the deal would damage competition in Europe.

The combined exchange operators would have “super dominance” in the provision of market indexes, exchange-traded funds and clearing, the European Investors’ Association wrote in a letter to European Competition Commissioner Margrethe Vestager. The investor group, started last year, was founded by the Dutch Investors’ Association and the European Financial Education Foundation. Euronext NV operates markets in the Netherlands.

The tie-up would hamper the aims of recent regulations that seek to boost competition and would be harmful to smaller markets, such as those operated by Euronext, the group said.

“The merger will result in a substantial lessening of effective competition and reduction of freedom of choice,” Paul Koster, chairman of the association, said in the letter.

Deutsche Boerse and LSE investors have accepted the deal, which still needs to be approved by both the European Commission and national regulators. In written submissions to the commission, Belgium and Portugal have said they oppose the buyout. In both countries, the national stock exchange is run by Euronext.

“The merger would create a leading Europe-based global markets infrastructure group that helps Europe to maintain and enhance its capital markets infrastructure,” a Deutsche Boerse spokeswoman said in an e-mail. “Linking London, Milan and Frankfurt via liquidity bridges will drive economic growth and job creation and this will support the capital markets union.”

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