Copying and distributing are prohibited without permission of the publisher
Global exchange M&A unlikely anytime soon - Jefferies
20 March 2017
Deutsche Boerse chairman recently put the blame for the faltering tie-up with the LSE on Brexit
Cross-border stock exchange mergers look increasingly tough
to execute, according to analysts at Jefferies.
The firm’s equity research unit reckons global
M&A between bourses is not likely in the near term.
Regulatory frameworks and nationalistic views are two key
Both appear to be taking precedence over economic value or
The comments come after Deutsche Boerse chairman Joachim
Faber recently put the blame for the faltering tie-up with the
London Stock Exchange on the Brexit vote.
The UK’s decision to leave the European Union
has created strong headwinds for the €29 billion deal.
Neither the LSE or Deutsche Boerse have formally abandoned
the tie up. The European Commission is set to deliver its
formal verdict on 3 April.
"With the LSE/DB1 in the ninth inning of collapse, the
general consensus amongst global exchange leaders was that
large scale global M&A is increasingly difficult," Dan
Fannon, a New York-based equity analyst at Jefferies, wrote in
a note on Monday.
"The regulatory framework as well as nationalistic views are
primary factors that determine the merits of a transaction vs
economic value or client benefit."
While the global M&A match making game might be taking a
pause in the short term, Fannon reckons that has the potential
to change as regulatory regimes change and broader global
uncertainty moderates (i.e. Brexit, European elections).
"In the meantime, without broad secular growth trends we
believe that smaller M&A such as tuck-in acquisitions will
continue to be the focus for most exchanges," Fannon added.