Shareholders approve Deutsche Börse merger

London Stock Exchange Group PLC shareholders on Monday approved the $30 billion planned tie-up with Deutsche Börse AG, a step toward the deal's completion but the challenge of winning over the German company's investors remains.

The proposed merger is being structured through a new holding company, to be based in London, that would own both exchanges. The holding company launched a tender offer for Deutsche Börse shares on June 1. It ends July 12.

A successful offer hinges on at least 75% of Deutsche Börse shares being tendered. Deutsche Börse isn't holding a shareholder meeting over the transaction. Of the votes cast by LSE shareholders, 99.89% were in favor of the deal.

"I strongly endorse the statement of London Stock Exchange Group following their General Meeting today and continue to recommend the transaction to the shareholders of Deutsche Börse," said Joachim Faber, chairman of Deutsche Börse.

However, the U.K.'s vote to exit the European Union has created uncertainty over whether the deal will be completed under the existing terms. The exchanges issued a joint statement on June 24 that they remained fully committed to the agreed terms, and "continue the process of obtaining the necessary approvals."

They also said the referendum committee consisting of six representatives of both companies, including Mr. Faber, and his LSE counterpart, Donald Brydon, would meet as and when necessary to assess the impact of the Brexit vote on the deal.

"We are convinced that the importance of the proposed combination of Deutsche Börse and LSEG has increased even further for our customers and will provide benefits for them as well as our shareholders and other stakeholders," Mr. Faber, who is head of the companies' referendum committee, said at the time.

Mr. Brydon, also designated chairman of the combined group, added that the merger represents a compelling opportunity for both businesses despite the vote.

People familiar with the matter told The Wall Street Journal on June 24 that the talks would circle around a potential relocation of the planned London-based holding company. Those people added they were skeptical both companies could agree on the issue without delaying the transaction. The committee likely will take several weeks, if not months, to make a recommendation over the deal.

Source: AFP