Despite two larger exchange mergers already failing this year, Deutsche Börse (DB) and NYSE Euronext (NYSE) still are in the process of getting regulatory approval. Although the proposed merger recently won approval from the Luxembourg Commission de Surveillance du Secteur Financier, the exchanges have received a Statement of Objections from the EU Competition Commission.
The list of objections has not been made public, but some analysts say they probably focused on the European derivatives landscape because the two companies both have large exchanges in that sector. "As is the case in most mergers where large entities are combining, regulators tend to focus on areas where competition could be harmed," says Andy Nybo, principal and head of TABB Group’s derivatives practice.
After receiving the Statement of Objections, both exchanges were quick to try to placate investor nervousness. "The Statement of Objections is a normal step in a second-phase merger procedure. It sets out a provisional position of the Commission and does not prejudge the final outcome of the case," NYSE said in a statement.
Nybo agreed with the NYSE statement, saying, "There’s communication going on around the parties, so it’s not a surprise for anyone that the regulators wanted more information about these topics."