The European Commission (EC) has opened an expected in-depth investigation into the proposed merger between Deutsche Börse and NYSE Euronext.
Following an initial investigation, the commission says it found ‘competition concerns in a number of areas, in particular in the field of derivatives trading and clearing’.
The EC is concerned because the deal would bring together the two largest derivatives exchanges in Europe.
Rivals, such as the London Stock Exchange (LSE), have already voiced their opposition to the deal. The LSE said last month the merger would ‘eliminate competition’ in the derivatives market in Europe.
The initial investigation also raised concerns about the impact on equities trading, settlement and index licensing, says the EC.
The in-depth investigation can last up to 90 days, until December 13. The opening of the in-depth inquiry ‘does not prejudice the final result of the investigation,’ the commission notes.
‘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,’ says Joaquín Almunia, the commission’s vice president in charge of competition policy, in a statement.
‘The commission needs to make sure markets that are at the heart of the financial sector remain competitive and efficiently deliver to users.’
In response, Deutsche Börse and NYSE Euronext have released a joint statement announcing that they remain confident the transaction will be approved.
The investigation by the commission is seen as the biggest hurdle to the deal, which must be approved by competition authorities on both sides of the Atlantic.
Both exchanges have already received overwhelming support for the proposed merger from their respective shareholders.
[Article by Tim Human, Inside Investor Relations]