Competition Commission Expresses Concerns Over LSE Takeover

by Robin Pilgrim, LawAndTax-News.com, London

01 August 2005

The UK's Competition Commission (CC) announced on Friday that it has provisionally concluded that the proposed acquisition of London Stock Exchange plc (LSE) by Deutsche Börse AG (DBAG) or Euronext NV (Euronext) would substantially lessen competition.

The CC found that either merger would make it more difficult for other exchanges to compete with the LSE in trading UK equities because of both bidders’ ownership or control over the future provision of clearing services to LSE. Any exchange attempting to compete with LSE and win the business of trading firms on the LSE would require access to LSE’s clearing services provider.

The Commission will now start discussions with interested parties concerning actions that could be taken to remove the anti-competitive effects of the proposed mergers. A summary of the CC’s provisional findings report, together with a notice of possible remedies to address the anti-competitive effect, have been published on its web site, and the full provisional findings report will be published this week.

Interested parties will be able to comment on the provisional conclusions before the CC publishes its final report. The CC has invited responses from the main parties and other interested parties on possible remedies by 18 August 2005 and the provisional findings by 19 August 2005.

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