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France Warns Over Stock Exchange Merger Deal

(c) Sky News 2016

France has raised concerns about the £21bn tie-up between the owner of the London Stock Exchange (Other OTC: LDNXF - news) and Germany's Deutsche Boerse (LSE: 0H3T.L - news) , saying it could cause competition problems.

French finance minister Michel Sapin called for the European Commission to intervene to stop the new group achieving a dominant position, and also warned of the possible consequences of the deal for Europe's economy.

The "merger of equals" agreed in March will see shareholders in Deutsche taking 54% of the new European giant in a deal set to complete by the end of this year or the first quarter of 2017.

It (Other OTC: ITGL - news) would create a group similar in scale to America's Intercontinental Exchange (NYSE: ICE - news) , owner of the New York Stock Exchange, leaving smaller rivals such as Euronext (Lisbon: ENX.LS - news) , operator of stock exchanges such as the Paris Bourse, far behind.

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French finance minister Michel Sapin said: "I want to express the concern of the French government on this tie-up.

"We have doubts about the consequences this could have for the financing of the real economy in France and Europe.

"The merger of these two entities will result in a large group which could hold within it a majority of the tools that make our markets function efficiently.

"That poses a competition problem, and we want to make sure the European Commission gets involved to avoid a situation where a dominant position arises."

France's economy minister Emmanuel Macron had previously voiced concerns earlier this year about possible competition issues arising and said it would assess the consequences for Paris's financial centre.

The LSE is one of the world's oldest stock exchanges and can trace its history back more than 300 years.

The wider LSE Group was formed in October 2007 when the London Stock Exchange merged with Milan stock exchange Borsa Italiana.

It has since completed further deals including the £1.6bn takeover of US stock index Frank Russell.