The London Stock Exchange Group (LON:LSE) and Deutsche Börse will promise up to $7 billion in trading efficiency savings to secure investor support for their planned merger, the Financial Times reported. The news comes after the Intercontinental Exchange is currently considering a counteroffer for the UK group.
The London Stock Exchange’s share price slipped into the red in today’s meeting, having lost 0.56 percent to 2,820.00 pence by 13:14 GMT. This fall is broadly in line with losses in the wider market, with the FTSE 100 index currently down 0.43 per cent to 6,155.97 points.
Persons with expertise in the matter told the FT today that the LSE and Deutsche Börse will emphasize the benefits of allowing clients to offset the capital requirements of overlapping trades currently housed on competing exchanges. Proponents of the merger believe it would bring capital savings of between $5 billion and $7 billion by “compressing” the requirements for businesses that currently attract duplicate regulatory capital.
The LSE and Deutsche Börse announced last month that they had begun talks on a stock-based merger that would create a £20 billion company. The merger would also provide customers with a single point of contact for the primary markets in London, Frankfurt and Milan, and would bring together the Euro Stoxx 50 index and FTSE Russell’s index portfolio under one roof.
However, the LSE shareholders are now awaiting full details of the synergy benefits of Deutsche Börse’s proposal before commenting on the advantages of the deal over a potential competing offer that could come from the Intercontinental Exchange. The NYSE owner confirmed last week that it is considering a counter bid for the UK group.
At 13:47 GMT on Tuesday 8 March, the London Stock Exchange Group Plc share price is 2,818.00 pence.