Deutsche Boerse-LSE Said to Extend EU’s March 13 Deal DeadlineBy
EU may extend deadline by another 5 to 10 days, people say
Extra time will give opportunity to market test remedies
European competition watchdogs may again extend their deadline for ruling on Deutsche Boerse AG’s takeover of London Stock Exchange Group Plc, according to people familiar with the discussions, giving regulators more time to review the firms’ clearinghouse operations.
The European Union may push out its March 13 deadline by another five to 10 days, the people said, asking not to be named because the discussions are private. The delay will give regulators an opportunity to ask others in the market about any remedies offered by the companies, which is known as a market test.
The takeover, valued at about $12 billion, would create Europe’s dominant operator in everything from indexes to stock markets and clearing, which is the most contentious part of the tie-up. Extensions are common in EU merger reviews and the Deutsche Boerse deal has been pushed back a few times from its initial deadline of Feb. 13.
Spokesmen for the companies and the EU declined to comment.
Clearinghouses collect collateral and monitor risks to prevent a derivatives default from spiraling out of control. The EU prevented a similar transaction in 2012 amid concerns it could shut out rivals to the clearing market.
The companies aim to put LSE’s massive swaps-clearing business under the same roof as Frankfurt’s derivatives clearinghouse, called Eurex. Doing so may make derivatives trading more efficient, but could also give the companies a worrisome amount of control over the market. LSE is selling a French clearinghouse as it seeks to re-assure regulators about about competition issues.
— With assistance by Aoife White