Expected talks of the London Stock Exchange Group Plc (LSE) and Deutsche Boerse AG have been confirmed on Tuesday that the companies are discussing a potential merger.
As for the major points, according to the official announcement from both of the companies, the possible agreement would come up with the structure of an all-share merger of equals under a new holding company. LSE shareholders would be entitled to receive 0.4421 new shares in exchange for each LSE share and Deutsche Boerse shareholders would be entitled to receive one new share in exchange for each Deutsche Boerse share. Based on this exchange ratio, the parties anticipate that Deutsche Boerse shareholders would hold 54.4 per cent, and LSE shareholders would hold 45.6 per cent of the enlarged issued and to be issued share capital of the Combined Group. The Combined Group would have a unitary board composed of equal numbers of LSE and Deutsche Boerse directors.
The complementary growth strategies, products, services and geographic footprint of LSE and Deutsche Boerse would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis. LSE and Deutsche Boerse believe that the possible merger would offer the prospect of progressive growth, significant customer benefits including cross-margining between listed and OTC derivatives clearing (subject to regulatory approvals), as well as substantial revenue and cost synergies and increased shareholder value.
All key businesses of LSE and Deutsche Boerse would keep operating under their current brand names. The existing regulatory framework of all regulated entities within the Combined Group would remain unchanged, pending necessary regulatory approvals.
There can be no certainty that any transaction will occur and any transaction would be a subject to regulatory approval.
It is expected that the Deutsche Boerse will announce by no later than 5.00 p.m. on March 22, 2016,company’s intention to make an offer for LSE or reject the possibility of this potential merger.
If the merger succeeds, it would be classified as a reverse takeover under the Listing Rules of the Financial Conduct Authority.
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