Banking, finance, and taxes

London, Deutsche Börse Agree to Merge

Thinkstock

The two largest stock exchange operators in Europe have agreed to combine in a merger that would create an exchange operator with a market cap of around £21 billion (about $29.6 billion). The London Stock Exchange (LSE) and Germany’s Deutsche Börse announced the combination Wednesday morning.

But rather than end speculation of takeover of the LSE by U.S.-based Intercontinental Exchange Inc. (NYSE: ICE), the announcement has only fueled speculation of a higher offer from the ICE.

According to the Financial Times, LSE shareholders would get 0.4421 shares in the combined group for every LSE share they own, while Deutsche Börse shareholders will receive one share. LSE shareholders would thus own 45.6% of the combined group, while Deutsche Börse shareholders would own 54.4%. LSE shareholders will be paid two dividends worth a total 37.2 pence, while Deutsche Börse investors will receive a payout of €2.25 per share.

The Wall Street Journal noted that the premium being offered for LSE is only 15% above its value before word of the deal leaked out in February. If the ICE does come in with a counter offer, the premium for LSE shareholders is very likely to be higher than that.

Regulators, of course, may have the final say, even if the ICE does come in with an offer. British and German regulators will be guided by their respective country’s political interests, making the proposed tie-up anything but a slam-dunk. And EU regulators are going to be examining the monopoly aspects of the deal.

Shares of LSE traded down about 0.6% Wednesday morning in London and shares of Deutsche Börse traded up about 1% in Germany. The ICE traded down about 0.9% at $234.51 in New York, in a 52-week range of $220.28 to $268.89.

The #1 Thing to Do Before You Claim Social Security (Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.