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London Stock Exchange in merger talks with Deutsche Börse - business live London Stock Exchange in merger talks with Deutsche Börse - business live
(35 minutes later)
3.39pm GMT
15:39
The day’s confidence figures show how fragile sentiment is at the moment, says analyst Connor Campbell at Spreadex:
Whilst the [US] existing home sales figure actually saw a mild increase month-on-month, from 5.45 million to 5.47 million, more notable was the sharp decline in the CB consumer confidence number.
Coming in at 92.2 against the 97.4 last month the figure, like this morning’s year-low German Ifo business climate data, highlights just how entrenched the market’s current fears are, despite the sporadic surges that have taken the global indices to a variety of recent highs. There was to be no such surge this afternoon, however, the Dow Jones dropping over 100 in light of that literal knock to the index’s confidence.
Over in the UK the FTSE fell past its earlier lows as the afternoon progressed, declining around 50 points to trickle underneath the 6000 mark following the weak US open, a drop exacerbated by Brent Crude slipping under $34 per barrel once again.
3.24pm GMT
15:24
LSE-Deutsche Börse deal faces "a number of challenges"
Back with the London Stock Exchange, and analysts at Numis point to a number of problems facing its proposed merger with Deutsche Börse:
This represents the third time the LSE and DB have attempted to merge, first in 2000 then in 2004. Although no details were given, a merger is expected to provide enhanced growth, significant customer benefits as well as substantial revenue and cost synergies.
However, we see a number of challenges in completing this deal, namely:
(1) the competition authority is likely to ask a number of questions as it would create a dominant player in exchanges and clearing in Europe – the EC blocked a similar deal between Deutsche Börse and NYSE Euronext in 2012 citing competition concerns;
(2) both have differing views on how to structure their respective clearing businesses – LSE backs open access (i.e. trading and clearing can occur on different platforms) whereas DB does not;
(3) national pride – would UK politicians be happy with the main UK exchange being owned by a foreign entity.
So whilst we see the obvious benefits from such a deal (namely cost and revenue synergies), we remain mindful of the challenges that would need to be overcome for it to complete.
3.16pm GMT3.16pm GMT
15:1615:16
The Richmond manufacturing index has also disappointed, coming in at -4 compared to the 2 which analysts had been looking for.The Richmond manufacturing index has also disappointed, coming in at -4 compared to the 2 which analysts had been looking for.
However US existing home sales have beaten expectations, up 0.4% in January compared to a forecast fall of 2.5%.However US existing home sales have beaten expectations, up 0.4% in January compared to a forecast fall of 2.5%.
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at 3.19pm GMTat 3.19pm GMT
3.14pm GMT3.14pm GMT
15:1415:14
USA Consumer Confidence announcement - Actual: 92.2, Expected: 97.0 pic.twitter.com/AggAe2BV5HUSA Consumer Confidence announcement - Actual: 92.2, Expected: 97.0 pic.twitter.com/AggAe2BV5H
3.08pm GMT3.08pm GMT
15:0815:08
US consumer confidence worse than forecastUS consumer confidence worse than forecast
US consumer confidence figures for February have come in much lower than expected, as the recent market volatility outweighs the benefits of cheaper oil.US consumer confidence figures for February have come in much lower than expected, as the recent market volatility outweighs the benefits of cheaper oil.
The index fell from 97.8 in January - itself revised down from 98.1 - to 92.2. Analysts had been expecting a figure of 97.The index fell from 97.8 in January - itself revised down from 98.1 - to 92.2. Analysts had been expecting a figure of 97.
This is the lowest level since July. Dennis de Jong, managing director at UFX.com, saidThis is the lowest level since July. Dennis de Jong, managing director at UFX.com, said
Despite relatively healthy numbers over recent months, onlookers will be concerned with the worrying dip in this month’s consumer confidence data.Despite relatively healthy numbers over recent months, onlookers will be concerned with the worrying dip in this month’s consumer confidence data.
It’s surprising that US shoppers have kept their wallets in their pockets for another month, especially considering that low gas prices continue to help them save.It’s surprising that US shoppers have kept their wallets in their pockets for another month, especially considering that low gas prices continue to help them save.
While the slip may have a short-term negative affect on the US Dollar, if gas continues to stay low, it’s only a matter of time before US consumers get the spending bug again.While the slip may have a short-term negative affect on the US Dollar, if gas continues to stay low, it’s only a matter of time before US consumers get the spending bug again.
RT @Riccanomix Big miss on consumer confidence in February, probably due to market turmoil. (92.2 vs. 97.8 prior) pic.twitter.com/UFdVAT3neORT @Riccanomix Big miss on consumer confidence in February, probably due to market turmoil. (92.2 vs. 97.8 prior) pic.twitter.com/UFdVAT3neO
UpdatedUpdated
at 3.12pm GMTat 3.12pm GMT
2.58pm GMT2.58pm GMT
14:5814:58
@LSEGplc + @DeutscheBoerse is Chicago's nightmare scenario: @LCH_Clearnet + @EurexGroup =creation of European intrestrate+OTC clearing giant@LSEGplc + @DeutscheBoerse is Chicago's nightmare scenario: @LCH_Clearnet + @EurexGroup =creation of European intrestrate+OTC clearing giant
2.50pm GMT2.50pm GMT
14:5014:50
Wall Street opens lowerWall Street opens lower
Meanwhile US stock markets have opened lower, in line with the dips on European exchanges.Meanwhile US stock markets have opened lower, in line with the dips on European exchanges.
The Dow Jones Industrial Average is down 40 points or 0.2% after another fall in oil prices - West Texas Intermediate is around 2% lower after a report Iran’s oil minister called the proposed output freeze ridiculous. At the open the S&P 500 is 0.3% lower and Nasdaq down 0.4%, ahead of the latest US consumer confidence figures.The Dow Jones Industrial Average is down 40 points or 0.2% after another fall in oil prices - West Texas Intermediate is around 2% lower after a report Iran’s oil minister called the proposed output freeze ridiculous. At the open the S&P 500 is 0.3% lower and Nasdaq down 0.4%, ahead of the latest US consumer confidence figures.
Back in Europe the FTSE 100 is currently down 22 points or 0.3%, but would be another 4 points or so lower if not for the 16% jump in the shares of the London Stock Exchange.Back in Europe the FTSE 100 is currently down 22 points or 0.3%, but would be another 4 points or so lower if not for the 16% jump in the shares of the London Stock Exchange.
2.38pm GMT2.38pm GMT
14:3814:38
It was not always so friendly between the LSE and Deutsche Börse:It was not always so friendly between the LSE and Deutsche Börse:
Ah deja vu. And here's the note accidentally sent by LSE in 2000. Blame "german intransigence" if merger aborted. pic.twitter.com/lLq15hsWA7Ah deja vu. And here's the note accidentally sent by LSE in 2000. Blame "german intransigence" if merger aborted. pic.twitter.com/lLq15hsWA7
And here’s the BBC’s story from the time.And here’s the BBC’s story from the time.
2.31pm GMT2.31pm GMT
14:3114:31
Sean FarrellSean Farrell
Here’s our first take on the LSE-Deutsche Börse merger plan:Here’s our first take on the LSE-Deutsche Börse merger plan:
The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a deal that would seal an alliance first discussed at the turn of the millennium.The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a deal that would seal an alliance first discussed at the turn of the millennium.
The LSE confirmed on Tuesday it was in detailed discussions with its German rival about an all-share merger. Under the proposed structure, Deutsche Börse shareholders would own 54.4% of the combined company and LSE shareholders would hold 45.6%.The LSE confirmed on Tuesday it was in detailed discussions with its German rival about an all-share merger. Under the proposed structure, Deutsche Börse shareholders would own 54.4% of the combined company and LSE shareholders would hold 45.6%.
The UK exchange said: “The boards believe that 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 UK exchange said: “The boards believe that 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 exchanges have considered combining forces before. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, but was then rejected. The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005.The exchanges have considered combining forces before. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, but was then rejected. The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005.
The full story is here:The full story is here:
Related: London Stock Exchange in merger talks with Deutsche BörseRelated: London Stock Exchange in merger talks with Deutsche Börse
2.22pm GMT2.22pm GMT
14:2214:22
David Cheetham of City trading firm XTB.com says a merger between the LSE and Deutsche Borse would create one of the world’s biggest financial trading platforms.David Cheetham of City trading firm XTB.com says a merger between the LSE and Deutsche Borse would create one of the world’s biggest financial trading platforms.
“Shares in London Stock Exchange Group have soared by over 17% in the past hour as news that they’re in talks with Deutsche Boerse have been confirmed. If the deal were to go ahead it would create a clear market leader for European and one of the largest exchanges in the world for trading and risk managing derivatives.“Shares in London Stock Exchange Group have soared by over 17% in the past hour as news that they’re in talks with Deutsche Boerse have been confirmed. If the deal were to go ahead it would create a clear market leader for European and one of the largest exchanges in the world for trading and risk managing derivatives.
The timing of this development appears coincidental as the possibility of a Brexit has become increased in recent days now that a referendum date has been set and Boris has joined the Out campaign.”The timing of this development appears coincidental as the possibility of a Brexit has become increased in recent days now that a referendum date has been set and Boris has joined the Out campaign.”
2.18pm GMT2.18pm GMT
14:1814:18
The news that Britain’s stock exchange could soon merge with its German rival has startled the City, especially given the upcoming EU vote.The news that Britain’s stock exchange could soon merge with its German rival has startled the City, especially given the upcoming EU vote.
Mike van Dulken, head of research at Accendo Markets, tweets:Mike van Dulken, head of research at Accendo Markets, tweets:
Interesting timing for #LSE #Deutsche Boerse merger talks given how close #Brexit referendum isInteresting timing for #LSE #Deutsche Boerse merger talks given how close #Brexit referendum is
1.56pm GMT1.56pm GMT
13:5613:56
LSE confirms merger talks!LSE confirms merger talks!
It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.
It says:It says:
Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.
This would create “a leading European-based global markets infrastructure group”, it claims, adding:This would create “a leading European-based global markets infrastructure group”, it claims, adding:
The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.
Under the plan, Deutsche Börse shareholders would hold 54.4% of the new company, while LSE shareholders would hold 45.6%.Under the plan, Deutsche Börse shareholders would hold 54.4% of the new company, while LSE shareholders would hold 45.6%.
The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.
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at 2.24pm GMTat 2.24pm GMT