Bloomberg News

Deutsche Boerse-NYSE Concession Offer Said Short of EU Demands

December 13, 2011

Dec. 6 (Bloomberg) -- European Union regulators told Deutsche Boerse AG and NYSE Euronext that the concessions they offered didn’t go far enough to eliminate antitrust concerns over their deal, two people familiar with the discussions said.

EU officials told Deutsche Boerse and NYSE at a meeting in Brussels today that customers and rivals weren’t swayed by their Nov. 17 offer to divest some European single-equity derivatives units, according to the people who couldn’t be identified because the talks are confidential. Regulators also weren’t convinced that offering competitors limited access to Deutsche Boerse’s clearing house would do enough to foster competition for exchange-traded derivatives, the people said.

Regulators have told the two companies that their deal to create the world’s largest exchange would monopolize derivatives trading in the region. The EU can block a deal or require concessions from companies to eliminate potential antitrust problems.

Deutsche Boerse and NYSE Euronext declined to comment on the meeting. Amelia Torres, a spokeswoman for the European Commission in Brussels, declined to comment.

While Deutsche Boerse and NYSE can offer more to appease regulators, they haven’t yet decided on next steps, the people said. Deutsche Boerse and NYSE Euronext have resisted selling their derivatives-trading arms Eurex and Liffe, saying in a February statement that they complement each other on interest- rate products.

Deutsche Boerse’s Eurex is the region’s biggest derivatives exchange, while NYSE Euronext owns Liffe, the second-biggest in Europe. The Frankfurt-based company agreed to acquire its New York rival in a deal valued at $9.5 billion when it was announced in February.

An EU antitrust complaint sent to the companies rejected arguments from Deutsche Boerse and NYSE that they aren’t direct rivals on short-term and long-term interest rate debt products.

The takeover would put more than 90 percent of the region’s exchange-traded derivatives market and about 30 percent of European stock trading in the hands of one organization.

--Editors: Christopher Scinta, Chris Nagi

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net; Nandini Sukumar in London at nsukumar@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net; Andrew Rummer at arummer@bloomberg.net.


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