EU investigates Deutsche Boerse-NYSE Euronext merger
European Union anti-trust officials launched Thursday a full probe into takeover plans aiming to create the world's biggest stock exchange.
"The European Commission has opened an in-depth investigation under the EU merger regulation into the planned merger between Deutsche Boerse AG and NYSE Euronext Inc," it said at the close of a preliminary probe announced June 29.
The new group, which covers stock exchanges in Amsterdam, Brussels, Frankfurt, New York, Lisbon and Paris, has been valued at 17.6 billion euros ($25 billion).
But the commission said an "initial market investigation indicated competition concerns in a number of areas, in particular in the field of derivatives trading and clearing."
It now has until December 13 "to take a final decision on whether the transaction would reduce effective competition" across Europe, it added.
Pension funds, mutual funds and retail banks, as well as professional brokers and investment banks would be most affected, the commission said in a statement.
"The proposed merger would remove a strong competitor from the market and would give the merged company by far the leading position in derivatives trading in Europe," said Joaquin Almunia, competition commissioner.
The commission "needs to make sure that markets which are at the heart of the financial sector remain competitive and efficiently deliver to users," he added.
The deal has sparked controversy in the United States because it would hand over the 221-year-old New York Stock Exchange to foreign owners.
Deutsche Boerse shareholders are to own 60 percent of the new combined, Netherlands-incorporated firm, and the German company will dominate the new board.
Shareholders controlling more than 80 percent of German stock market operator Deutsche Boerse approved the deal on July 14, after NYSE Euronext shareholders gave their blessing.
The commission said that fee competition may be reduced due to increased difficulties for competitors to enter the market.
The initial EU probe revealed concerns that rival derivatives platforms would find it more difficult to enter "a market already characterised by high barriers to entry."
There were also some worries over equities, or shares trading, they said.
Almunia's staff stressed that the decision "does not prejudge" the investigation's final outcome.
© 2011 AFP