EU to formally veto Deutsche Boerse LSE merger shortly -sources

* EU poised to formally block Deutsche Boerse LSE deal - sources

* Announcement expected March 29 -source

* Deutsche Boerse (IOB: 0H3T.IL - news) , LSE, EU Commission decline comment (Adds LSE declines to comment, background)

FRANKFURT/BRUSSELS, March 22 (Reuters) - The European Commission will shortly veto a proposed merger between Deutsche Boerse and the London Stock Exchange (Other OTC: LDNXF - news) , four sources close to the matter said on Wednesday, scuppering plans to create Europe's biggest exchange.

The European Commission, the London Stock Exchange and Deutsche Boerse declined to comment.

The veto will be published within a matter of days, the people said.

One said that the ruling was expected on March 29, but that the timing of the announcement may slip. Britain's government is due to initiate proceedings for leaving the European Union on Wednesday next week.

A plan to combine the Frankfurt and London exchanges had only a slim chance of getting regulatory clearance after the LSE last month declined to accede to a demand from the European Commission that it sell its MTS Italian trading platform.

The breakdown leaves a question mark over the strategy of the exchanges in London, Europe's financial capital, and Frankfurt, the equivalent for Germany, the region's biggest economy.

There had already been five attempts, three public and two informal, to combine the London and Frankfurt bourses during the past decade, while the EU blocked a $17 billion tie-up between what was then NYSE Euronext and Deutsche Boerse in 2012.

The failure of the most recent deal had been feared by many involved, amid growing calls from German politicians that the headquarters be shifted from London to Frankfurt because of Brexit - a concession the LSE did not want to make.

Further complicating the picture, German state prosecutors had opened an investigation into Deutsche Boerse Chief Executive Carsten Kengeter, who had been due to head the combined group, for possible insider trading. Kengeter denies any wrongdoing and no charges have been brought. (Reporting by Andreas Kroener and John O'Donnell in Frankfurt and Foo Yun Chee in Brussels; Writing by Edward Taylor; Editing by Greg Mahlich)