London Stock Exchange, Deutsche Boerse discuss merger
The trading room of the stock market is photographed in Frankfurt, Germany, Tuesday, Feb. 23, 2016. (Michael Probst / AP)
Danica Kirka, The Associated Press
Published Tuesday, February 23, 2016 11:49AM EST
LONDON -- The London Stock Exchange Group and Germany's Deutsche Boerse are in talks to merge into a group valued at around 21 billion pounds ($30 billion).
The potential deal announced Tuesday would create one of the largest exchanges in the world, rivaling the likes of CME Group and the Intercontinental Exchange in the United States. It marks the third time the companies have attempted to merge, with previous efforts in 2000 and 2004 ending in failure.
LSE shares surged 16 per cent on the news while Deutsche Boerse shares were up 6 per cent.
Under the proposed deal, the terms of which have yet to be finalized, Deutsche Boerse shareholders would hold 54.4 per cent of the merged company. Each company would have an equal number of seats on the board of directors.
"The potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group," the companies said in a statement.
Under the proposed terms, LSE shareholders would get 0.4421 shares in the new company for each LSE share they hold. Deutsche Boerse shareholders would be entitled to receive one new share in exchange for each Deutsche Boerse share they hold.
All key business will continue to operate under their current brand names.
Founded in 1801, the London exchange merged with the Milan stock exchange, the Borsa Italiana in 2007, to form the wider LSE group.