Deutsche Boerse crosses 50 pct approval level for LSE merger

(Adds reactions from Bundesbank, Portugal, Belgium)

By Arno Schuetze

FRANKFURT, July 13 (Reuters) - Deutsche Boerse (LSE: 0H3T.L - news) has won the backing of the majority of its shareholders for its planned merger with the London Stock Exchange Group but opposition to the deal increased in other European capitals.

Portugal and Belgium on Wednesday asked Europe's anti-trust chief to act to prevent the merged group becoming so dominant that it would make access to finance more difficult.

"I am also concerned that the high level of concentration of trading and Euro clearing activities in one group could be detrimental both to the desirable competitive environment as to financial stability," Belgian Finance Minister Johan van Overtveldt wrote to the EU competition watchdog in a letter seen by Reuters.

However, the deal won support from Bundesbank board member Andreas Dombret who said on Wednesday that the business case had been strengthened by last month's British vote to leave the European Union.

"Once the UK has left the European Union, bridges between both economies will be more important than ever before," he added. "The announced merger of LSE and Deutsche Boerse has the potential to become such a bridge."

HALFWAY HOUSE

By 1200 GMT on Wednesday, 51.3 percent of Deutsche Boerse shares had been tendered, the company said, adding that this corresponded to an acceptance level of 53 percent, once treasury shares were taken into account.

Crossing the 50 percent barrier means that many index funds are now able to tender their shares, as their internal guidelines often demand they act only once that threshold has been reached.

On Monday, Deutsche Boerse lowered the level of approvals needed to 60 percent from an earlier minimum of 75 percent as the group tries to keep the merger on track following Britain's vote to leave the EU and concerns from Germany's markets regulator.

Roughly 15 percent of Deutsche Boerse shares are held by index funds or so-called exchange traded funds (ETFs (Shenzhen: 395013.SZ - news) ), which replicate stock indices like Germany's blue chip index DAX .

Deutsche Boerse had asked its shareholders to back the deal -- the third attempt by the LSE to merge with the German exchange operator in some 16 years -- in a postal vote that had been due to close on July 12.

The acceptance period has been extended for a further two weeks to July 26.

While 99 percent of the LSE shareholders approved the deal and Deutsche Boerse is expected to win backing from its shareholders, too, financial regulators in Germany and Britain, along with European Union antitrust authorities, are likely to pose a sterner challenge to the $27 billion merger.

Terms of the deal cannot be changed until the merger closes around the end of June next year. Deutsche Boerse and LSE officials have signalled they are willing to do whatever it takes to get the green light from regulators. (additional reporting by Robert-Jan Bartunek; Editing by Tina Bellon/Keith Weir)