Exchange Merger Blocked

The EU Commission has formally blocked the proposed merger between Deutsche Borse and NYSE Euronext.

Explaining the decision, Joaquin Almunia, the EU competition commissioner, stated that the deal would have created a “near monopoly” in exchange-traded derivatives which he could not have permitted.

He went to state that the commission is not interested in creating a European champion to compete against US interests.

Reto Francioni, CEO of Deutsche Borse, described this as a black day for Europe with the decision blocking Frankfurt’s opportunity to compete on an equal footing with New York.

The deal would have created the world’s platform for company listings, the largest derivatives exchange and a group with four times the revenues of the London Stock Exchange. It would have handled more than 95 per cent of trading in short term interest rate futures and German government bond futures.

NYSE Euronext stated that it was disappointed that the EU Commission had a fundamentally different understanding of the derivatives market.