Oct. 28 (Bloomberg) -- Deutsche Boerse AG and NYSE Euronext have until Nov. 17 to offer concessions that may appease the concerns of European Union regulators over their bid to form the world’s largest exchange, according to three people familiar with the situation.
The companies will meet EU officials to discuss merger remedies, said the people, who couldn’t be named because the date is confidential. Concessions would have to eliminate EU concerns that the takeover could monopolize derivatives trading in Europe, according to a separate person familiar with an antitrust complaint sent to the exchanges earlier this month.
Deutsche Boerse and NYSE Euronext defended their proposed $7.2 billion deal at a hearing in Brussels today against EU criticism that it may harm competition and restrict innovation in financial markets. EU regulators can block anti-competitive deals, require companies to sell units or change the way they do business to eliminate antitrust concerns.
Ruediger Assion, a spokesman for Frankfurt-based Deutsche Boerse, and Richard Adamonis, a spokesman for NYSE Euronext in New York, both declined to comment on the deadline for remedies. The European Commission didn’t respond to calls and e-mails seeking comment.
Deutsche Boerse had “strong arguments at hand” at the EU hearing to prove that the deal’s “impact on competition is negligible,” Chief Financial Officer Gregor Pottmeyer said on a conference call today to discuss third-quarter earnings. “Regulatory reform ensures competition between listed and over- the-counter derivatives markets will not only continue, but be invigorated. There is minimal product overlap today between NYSE Euronext and Deutsche Boerse.”
The European Commission’s antitrust complaint said that the companies’ trading arms directly compete. This meant it rejected claims by Deutsche Boerse and NYSE Euronext that they aren’t rivals on the grounds that Eurex, the derivatives exchange owned by the German company, specializes in longer-term debt products and NYSE’s Liffe focuses on short-term interest-rate contracts, a person familiar with the talks said yesterday.
The exchange is still seeking to close the deal by the end of the year, Pottmeyer said. That deadline is not in the exchange’s control though, he added, as the EU is set to rule only by Dec. 22 and the State of Hesse, Deutsche Boerse’s regulator, will wait for the EU before making its judgment.
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