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Europe Blocks NYSE and Deutsche Boerse Merger
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The European Commission blocked a merger between Deutsche Boerse and NYSE Euronext, following a recommendation last week by competition commissioner Joaquin Almunia to forbid the deal, Deutsche Boerse said Wednesday in a statement.
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Sandra Baker | Photographer's Choice | Getty Images |
The European Commission wanted Deutsche Boerse [DB1
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] and the NYSE [NYX
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] to sell either their Eurex derivatives arm or Liffe, saying that without these measures the merger would monopolize trading in derivatives in Europe.
"Despite the remedies offered by the companies, the European Commission concluded that the combination would significantly impede effective competition and declared the concentration to be incompatible with the Common Market," Deutsche Boerse's statement said.
Almunia said the merger would have created almost a monopoly in the trading of derivatives.
"The merger between Deutsche Boerse and NYSE Euronext would have led to a near-monopoly in European financial derivatives worldwide," he said in a statement.
"These markets are at the heart of the financial system and it is crucial for the whole European economy that they remain competitive. We tried to find a solution, but the remedies offered fell far short of resolving the concerns."
Last week, in an interview at the World Economic Forum in Davos, Almunia dismissed criticism that moves to block the merger between NYSE Euronext and Deutsche Boerse were indicative of a Europe-wide problem of being too difficult on regulation.
He said trading in over-the-counter derivatives needed to be transparent and competition needed to be encouraged.
"The clearing of these derivatives will become a bigger and bigger activity in our capital markets. Therefore, we need to look for competition if we don't have this all the businesses that use derivatives will suffer," Almunia said.
NYSE Euronext CEO Duncan Niederauer said the decision was a disappointment.
"This deal was conceived in post-crisis atmosphere. This now represents a missed opportunity for investors and for Europe," Niederauer told CNBC in an interview.
"I don't think you'll see any mega-mergers in our industry any time soon," he added.
In the last year the sector has seen three large deals fail for different reasons.
Nasdaq and Intercontinental Exchange's bid for NYSE Euronext was rejected by the U.S. Department of Justice. London Stock Exchange's proposed takeover of TMX Group was aborted after shareholders of the Toronto Stock Exchange operator rejected the deal.
Singapore Exchange's bid for Australia's ASX was stopped by the Australian government.
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