Soon, the landscape of Europe's stock exchanges might never be the same, as the London Stock Exchange (LSE) has confirmed merger talks with Germany's Deutsche Boerse, reports CNN Money. If the merger is successful, the combined firms would create a financial behemoth capable of meeting its rivals, such as Intercontinental Exchange (ICE), which operates the New York Stock Exchange (NYSE).
Though the LSE's announcement pertained to the merger as that of "equals," the proposed deal nonetheless entails a rather unequal split, with Deutsche Boerse shareholders holding 54.4 percent of the combined group, as opposed to LSE's shareholders, which would hold about 45.6 percent, reports USA Today.
The proposed merger marks the third time the two financial firms have attempted to combine. Its first and second attempts in 2000 and 2004-2005, both ended in failure.
The companies' most recent attempts seem to have been embraced well by investors, however, as LSE's shares rose 17 percent after the merger announcement. Deutsche Boerse shares rose 7 percent as well, reports BBC News.
Markus Huber, an analyst at stockbroker City of London Markets, believes that the merger would be beneficial for both firms. "Although negotiations seem to be at a very early stage, a tie-up would make sense in regard to possibly synergies and overall improvement of competitiveness versus their main rivals," he said.
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