Nery Alaev

LSE in talks with German rival 

Nery Alaev writes about a recent event in the finance industry.

London Stock Exchange Group plc is in merger talks with Deutsche Boerse AG, with a potential merger of the two major stock exchanges now on the cards.

I’ve decided to look into the exciting announcement and find out more.

Strong leaders

The leaders of the two respective exchanges, Xavier Rolet (LSE) and Carsten Kengeter (DB), have both made major changes in their time as leaders of the two organisations.

nery alaev

Two major organisations are set to meet

For example, Xavier Rolet has bought an index provider and has expanded clearing whereas Carsten Kengeter spent $1.5bn in 60 days after taking the helm of the exchange. Purchases included a currencies trading platform and a majority share in an important Euro-area stock index.

The two leaders have obvious ambitions for their respective organisations, so the news comes with less surprise than anticipated.

The talks don’t necessarily mean a deal however they have helped shares of both companies to rise – LSE by 16% and DB by 7.3%.

The deal would be a merger ‘of equals’, which indicates that no dominant partner will exist if talks are successful.

Historic deal

According to an article in Business Insider, the merger was initial proposed in 2001, 15 years ago.

An LSE statement on the merger states:

„The Boards believe that the Potential Merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group.“

The statement clearly points towards a partnership of equals, or at least an intention of one. The reality may be different, given the strong-minded leaders of both organisations and their respective strengths in their own markets.

Given the advanced stage of the talks, however, it’s certain that something interesting will materialise.

Nery Alaev

Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.