Professor John Colley Of Warwick Business School: …Proposed London Stock Exchange Group And Deutsche Boerse Merger…. Savings Seem Rather Meagre In A Merger Which Appears To Be Designed To Avoid Upsetting Staff, Directors And, Indeed, Competition Authorities ….

Commenting on the proposed London Stock Exchange Group and Deutsche Boerse merger, Warwick Business School's Professor John Colley said: "The savings seem rather meagre in a merger which appears to be designed to avoid upsetting staff, directors and, indeed, competition authorities.

"The real issue is achieving scale to compete on a global scale against already consolidated opponents. Europe needs a strong champion to compete against the US exchanges and Hong Kong. However, competition authorities remain to be convinced of this argument. In the past European competition authorities have tended to see such mergers at a European level. The issue this time may also be the complications of a possible Brexit.

"While promoted as a 'merger of equals' with top jobs respectively filled by a balance of directors from both businesses, in practice such arrangements rarely work. The chairman is from the LSE, while the deputy chairman and chief executive are from Deutsche Boerse. 'Mergers of equals' usually result in a lack of clarity in direction and leadership as both camps jockey for influence. A result is a confused structure and a failure to drive cost savings opportunities arising from the merger. However, this may well not be quite as the financial PR suggests, as there are a number of interests to satisfy.

"Currently the most likely intervention will come from the US network of exchanges and clearing houses, Intercontinental Exchange (ICE), lead by founder and president Jeffrey Sprecher. However, the current approach of the LSE and Deutsche Boerse may not be aggressive enough to see off Sprecher's unwanted attention."