Deutsche Boerse expects deep EU concerns over London Stock Exchange deal

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    The plaque of the Deutsche Boerse AG is pictured at the entrance of the Frankfurt stock exchange February 1, 2012.

    Deutsche Boerse expects EU antitrust regulators to set out details of their concerns over its merger with London Stock Exchange next month, two people familiar with the matter said on Tuesday, a move indicating regulators want hefty concessions in return for clearing the deal.

    The European Commission, which opened a full investigation into the 27 billion euro (£24.05 billion) merger in September citing preliminary worries, is likely to send a statement of objections in December, the people said.

    Such documents usually lay out the case for the EU enforcer to block anti-competitive mergers unless companies can convince them otherwise with concessions.

    The Commission, Deutsche Boerse and LSE declined to comment.

    LSE has already said it is prepared to sell LCH SA, the French clearing subsidiary of the LSE’s LCH.Clearnet group, but has not made a formal offer to the Commission.

    Deutsche Boerse CEO Carsten Kengeter earlier on Tuesday defended the combined strength of the stock exchanges’ clearing operations.

    “Now more heat than light has been generated than elsewhere around the alleged potential threat to financial stability from merging two central counterparties, LCH and Eurex Clearing. Let me be very clear, close examination shows that these fears are entirely misplaced,” Kengeter told a conference in Brussels.

    “For a start, the two CCPs are to remain operationally entirely separate. Secondly, the fact that they will share a common corporate structure will in fact aid financial stability,” he said.

    The Commission is scheduled to decide by Feb. 13 on the deal, which can be extended once the companies offer concessions.

    (Additional reporting by Huw Jones in London; Editing by Ruth Pitchford)