London and German exchanges hold merger vote after EU poll

Decision due in July
Decision due in July

The London Stock Exchange (LSE) and Deutsche Borse have confirmed they will hold a shareholder vote on their planned £21 billion merger after the EU referendum.

Shareholders will decide on the merger in July and the two bourses are expecting to send out a deal prospectus next month.

The two exchanges have previously said the deal is Brexit-proof, but have opted to wait until after the vote on June 23 to allow shareholders to digest any potential implications.

They previously said the “outcome of the referendum would not be a condition of the potential merger”, although they have admitted a Brexit could “affect the volume or nature of the business carried out by the combined group”.

LSE shareholder meetings will take place in July, while the deadline for Deutsche Borse shareholders to accept the offer will also be in July, the companies said.

The proposed merger was given a boost earlier this month when the owner of the New York Stock Exchange - the Intercontinental Exchange (ICE) - said it would not pursue a takeover of the LSE.

The move paved the way for an all-share merger between LSE and Deutsche Borse, which ICE had threatened to gatecrash.

In March, ICE said it was mulling a takeover of LSE, with a bidding war with Deutsche Borse widely expected to follow.

LSE chief executive Xavier Rolet has made no secret of his preference for a tie-up with Deutsche Borse, although the deal still faces regulatory scrutiny.

The deal will see Mr Rolet step down, with Deutsche Borse boss Carsten Kengeter becoming chief executive of the combined company and LSE’s Donald Brydon taking up the role of chairman.

Under the merger plans, the combined LSE and Deutsche Borse will maintain headquarters in London and Frankfurt, while it will also be listed on the LSE and Frankfurt Stock Exchange.

It marks their third attempt to merge after previous moves failed in 2000, and 2004-5 when talks collapsed.