Critics pin hopes on European Commission to block LSE takeover
Opponents of the £21bn deal to sell the London Stock Exchange to Deutsche Borse in Frankfurt hope it will be derailed by a report from Brussels next week. The takeover has been criticised by British politicians who fear it would be against the national interest. Theresa May has refused to intervene, hence opponents are hoping the European Commission will use its powers to block takeovers to stop the deal going ahead. The commission is set to outline its concerns in a statement of objections next week.

Critics of a £21bn deal to sell the London Stock Exchange to the Germans hope it will be derailed by a report from Brussels next week.

Deutsche Borse in Frankfurt wants to acquire the 215-year-old LSE in what both sides insist would be a merger of equals, even though it would give the Germans full control.

The takeover has been criticised by British politicians who fear it would damage the national interest.

Sign of the times: Opponents of the merger now hope the European Commission will block the deal

But despite her pledge to prevent harmful foreign deals, Prime Minister Theresa May has refused to intervene.

Opponents of the merger now hope the European Commission, which has tough powers to block takeovers if they are perceived to harm competition, will step in to prevent the deal going ahead.

The commission is set to outline its concerns in a statement of objections next week.

It will list areas where the tie-up will concentrate too much power in one company, and demand changes to protect customers.

This could force the LSE and Deutsche Borse to ditch valuable assets if they want to gain approval, making the deal less attractive.

The London Stock Exchange has already said it will sell its French clearing operations to placate the commission, but there are doubts about whether this will be enough. Speaking after it emerged that a statement of objections was being compiled, Numis Securities analyst Jonathan Goslin said: ‘It reinforces my existing view that there’s a growing probability that the deal is likely to fail.’

He added: ‘If they start divesting assets, that’s obviously going to have an impact.’

However, Deutsche boss Carsten Kengeter said he was optimistic that the deal would go ahead.

He added: ‘We feel very confident with what we’ve done so far.’ The takeover will see Kengeter take the helm of the new company, with the German side’s shareholders getting a controlling stake.

Bosses have promised their corporate headquarters would be in London, but sources have said this pledge could be abandoned after the merger is completed if the Germans demand it.

A takeover would trigger a bumper payday for lawyers, spin doctors and investment bankers, with the cost of fees estimated at £235m. Deutsche Borse’s consultants will rake in as much as £98.5m, with £46.2m earmarked for financial advisers alone.

Another £30.9m is expected to be pocketed by the German giant’s lawyers, some £4m by it its accountants and a further £2.8m by public-relations advisers.

The LSE is preparing to hand over £135.6m, with bankers taking up to £85.6m, the lawyers £37.5m and the accountants £3.2m.