Bloomberg News

Europe Has ‘Many Missed Opportunities,’ Deutsche Boerse CEO Says

January 24, 2012

Jan. 24 (Bloomberg) -- Deutsche Boerse AG’s Chief Executive Officer Reto Francioni said “Europe has too many missed opportunities” and the region is “suffering the consequences of these errors,” as regulators prepare to block his planned takeover of NYSE Euronext.

“Too many times in the past decades, one-sided perceptions of capital markets have prevailed in which the international dimension was ignored, and we’re still suffering the consequences of these errors,” Francioni said at the Frankfurt exchange operator’s annual new year reception today. “Europe has too many missed opportunities to show. I only have to mention the failure to create a European rating firm, something so vital, or the failure to stem unregulated off-market trading as examples of this.”

The exchanges are in the final week of fighting for their deal with the European Commission, the European Union’s executive arm, which is scheduled to decide Feb. 1. The commission told the two companies that they plan to block the deal to create the world’s largest exchange because it would monopolize derivatives trading in the region, according to two people familiar with the draft decision in December.

Deutsche Boerse’s attempt to merge with NYSE contributes to work “to boost Europe’s weight in the future order of the global financial system,” Francioni said, adding he’s awaiting the decision from Brussels “shortly.”

Significant Opposition

The exchanges are unlikely to garner sufficient support from EU commissioners to overturn a looming veto over their plan to create the world’s largest exchange, according to four people familiar with the situation. The EU’s antitrust chief, Joaquin Almunia, won’t face significant opposition from other EU commissioners to his proposal to block the deal at a Feb. 1 meeting, said the people, who can’t be identified because the discussions aren’t public.

Deutsche Boerse’s chairman Manfred Gentz said he finds it “difficult to comprehend” how European regulators can block a deal that’s driven by global competition and will benefit the region.

“It is neither frivolous megalomania nor a striving for anti-competitive dominance that pushes us to fight for the merger between our company and NYSE Euronext,” Gentz said at the same reception. “It is against the backdrop of markets that can no longer be viewed as national or local or regional, but as global.”

NYSE and Deutsche Boerse appealed directly to commission President Jose Manuel Barroso earlier this month to salvage their merger, arguing that if the commission stops the deal, its decision will harm European exchanges and drive business to other parts of the world.

Duncan Niederauer, NYSE’s chief executive officer, and Francioni are lobbying regulators and EU officials at the World Economic Forum in Davos, Switzerland, this week.

--Editors: Angela Cullen, Will Hadfield

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net

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


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