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Commenting on the news Euronext is in talks with LSE regarding the purchase of the French clearing arm of LCH SA, John Colley, a Professor of Practice at Warwick Business School and an expert on mega mergers, has made the following statement:
"Despite fears that the EU Competition Commission may reject the €24Bn merger between LSE and Deutsche Borse, the parties clearly still believe the deal is viable.
"The EU Competition Commission will have identified and communicated areas of concern which LSE and Deutsche Borse are currently attempting to address. News negotiations are progressing with Euronext to buy Clearnet, now called LCH SA, the French clearing house, predominantly for interest rate swaps, suggests the bigger deal is still on track.
"As half of Clearnet's trade is with Euronext it makes sense to start there as they can probably achieve the greatest benefits from the purchase, and hence will probably pay the highest price.
"Whilst Nasdaq and CME may also be interested the extent of Euronext's trade with Clearnet suggests they will have a say in where the business ends up and its value. Any deal will be conditional on the LSE and Deutsche Borse merger going ahead."
