LSE-Deutsche Boerse merger to cost exchange groups up to £304 million

Mega-merger could cost exchange groups a combined £304 million in expenses and fees.

The proposed merger between the London Stock Exchange (LSE) and Deutsche Boerse could cost the exchange groups a combined £304 million, according to a breakdown of expenses and fees published this week.

Deutsche Boerse is expected to incur expenses and fees estimated to amount up to £129 million and the LSE is expected to incur expenses up to £175 million.

The breakdown includes financial and corporate broking advice, legal advice, accounting advice and public relations advice.

The estimates have been revised for additional work due to the lengthy and complex EU merger regulation process, as well as the proposed sale of LCH SA announced earlier this year.

Euronext has made an all-cash offer of €510 million to purchase the French-based clearing house, although the acquisition is subject to review and approval by the European Commission.

The European Commission’s objections over the proposed merger of the LSE and Deutsche Boerse have recently “narrowed”, according to both exchange groups.

Both parties confirmed receipt of the Commission’s statement of objections in December last year and said it reflected a “narrower scope of issues”.

Competition regulators have wound down the list of concerns over the potential merger to clearing of derivatives contracts.

LSE and Deutsche Boerse confirmed plans to merge in February this year. If completed, the merger would create one of the largest exchange groups in the world.