[credit provider=”Andrew Burton”]
Both the Financial Times and Charlie Gasparino at Fox Business News are reporting that EU Regulators intend to block the merger of exchange operators NYSE Euronext and Deutsche Börse.EU regulators have cited concerns over competition in the derivatives business in the merger and have asked the parties to sell or spin off part of the derivatives business—which executives have stated they are unwilling to do, according to the FT.
The $17 billion deal, announced in 2011, would have created the world’s largest exchange operator. The recommendation to block the merger could be stopped with the backing of key political figures, such as German Chancellor Angela Merkel and EU commissioners, so the NYSE and Deutsche Börse will have three more months to hone in on European lobby efforts as the deal proceedings will terminate in March 2012.
Bloomberg reported earlier today that the heads of NYSE and Deutsche Börse had planned a meeting in New York tomorrow to discuss the merger and plans to persuade influential figures to support the deal.
The EU block had been expected by many industry professionals, a portfolio managers covering Deutsche Börse stock told the Wall Street Journal last week chances of an approval was only 40%.
In the US, the Justice Department approved the deal in late December, only requiring a small divestiture of the NYSE.