LSE “highly unlikely“ to meet EC conditions for Deutsche Börse

The proposed £24 billion merger between London Stock Exchange (LSE) and its German counterpart Deutsche Börse had failed to win the approval of regulators in Brussels, over antitrust concerns.

According to the LSE it was ''highly unlikely'' to meet antitrust conditions set by the European Commission over the deal.

The aborted merger attempt would be the third, after attempts in 2000 and 2005 ended in failure.

The LSE, which also runs the Milan stock exchange had been requested by the EC to sell its majority stake in its Italian division, MTS. The LSE considered the request and concluded that ''it could not commit to the divestment of MTS''.

The group said, ''The LSE board believes it is highly unlikely that a sale of MTS could be satisfactorily achieved, even if LSE were to give the commitment. Moreover, the LSE board believes the offer of such a remedy would jeopardise LSE's critically important relationships with these regulators [in Italy] and be detrimental to LSE's ongoing businesses in Italy and the combined group, were the merger to complete.''

The commission, which raised new concerns over the merger in mid-February, had given LSE a deadline of 27 February midday for a response.

The LSE said, "Based on the commission's current position, LSE believes that the commission is unlikely to provide clearance for the merger."

The two sides had been quite open about their intention to create a company with a powerful presence in key markets, and had also offered several sops to competition authorities in an attempt to win their approval.

However, that failed to meet the regulators' concerns. Brussels wanted LSE to cede control of MTS, an important Italian clearing house with a crucial role in the trading of Italian government debt.