Whither now LSE, Deutsche Börse

Whither now the proposed merger between the London Stock Exchange Group and Deutsche Börse?

The question presents itself following the LSEG’s publication of an updating document saying it would unlikely to meet a condition set by the European Commission for awarding its approval, the sale of LSEG’s majority stake in MTS of Italy.

Says the LSEG: “Following dialogue with Italian authorities about the Commission’s required remedy and given prior discussions between the principals and Italian authorities regarding LSEG’s Italian businesses in the context of the Merger, the LSEG Board believes that it is highly unlikely that a sale of MTS could be satisfactorily achieved, even if LSEG were to give the commitment.

“Moreover, the LSEG Board believes the offer of such a remedy would jeopardise LSEG’s critically important relationships with these regulators and be detrimental to LSEG’s ongoing businesses in Italy and the Combined Group, were the Merger to complete.

“Taking all relevant factors into account, and acting in the best interests of shareholders, the LSEG Board today (February 26) concluded that it could not commit to the divestment of MTS. LSEG will therefore not be submitting a remedy proposal with respect to MTS. Based on the Commission’s current position, LSEG believes that the Commission is unlikely to provide clearance for the Merger.

“Nevertheless, the LSEG Board remains convinced of the strategic benefits of the Merger and recognises the strong support from shareholders for the transaction. LSEG will continue to take steps to seek to implement the Merger.”

The world will surely watch with great interest, not least because this is arguably the biggest negative development in recent months not to have been blamed on the UK electorate’s vote on June 23 last year to leave the European Union, suggesting we might at last have passed ‘Peak Brexit’.