EU regulators to probe Refinitiv-LSE deal amid competition concerns

Europe’s antitrust watchdog opened an investigation 22 June into London Stock Exchange Group’s planned $15bn deal to acquire financial data giant Refinitiv, cautioning that the proposed deal could undermine competition.

The European Commission, as expected, expressed concern that bringing together LSE and Refinitiv’s respective trading and clearing activities and financial data products could give the combined entity undue market power. One such area is in the trading of European government bonds, the regulator said.

It also flagged the potential market dominance that could be gained in the trading and clearing of interest-rate derivatives.

“The Commission has preliminary concerns that following the proposed transaction, competitors in consolidated real-time data-feeds and desktop services could be shut out from accessing [London Stock Exchange’s] input data,” the commission said.

The LSE did not offer any concessions to try to ward off the in-depth probe. Now the exchange operator has until 27 October to bring the commission onside — with or without offering remedies — or risk the deal’s collapse.

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LSE agreed last year to acquire financial information and terminal business Refinitiv from a Blackstone-led consortium, in a bold bet on the growing demand for market data that would place the UK-based exchange operator in direct competition with industry heavyweight Bloomberg.

The LSE said it noted the announcement and would continue to engage constructively with the commission. It said it remained committed to completing the deal this year. Refinitiv declined to comment.

The antitrust review is the second in as many weeks of a major European deal after the commission last week took similar action against the proposed Fiat Chrysler Automobiles and Peugeot merger. That tie-up is meant to create one of the world’s biggest car makers as the sector faces the heavy cost of investing in electric vehicles and self-driving technology. The commission said that probe was needed to ensure the tie-up did not undermine competition in the bloc’s commercial van market.

These two high-profile reviews could prove to be test cases for the commission’s antitrust-review process after it suffered a setback resulting from the General Court of the European Union’s decision last month to annul the commission’s 2016 decision to block CK Hutchison ’s planned multibillion-dollar acquisition of British mobile operator O2.

The court ruled that the commission had failed to show how the merger would “constitute a significant impediment to effective competition”.

LSE also has a lot riding on the probe’s outcome after its previous bet on overcoming an in-depth regulatory review failed. In 2016, the company agreed to merge with German rival Deutsche Börse in a $30bn deal to create Europe’s largest exchange operator. But the next year, the commission blocked the tie-up after the LSE refused to sell its electronic trading bond platform in Italy to address its market power over clearing of fixed income trading in Europe.

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The Deutsche Börse merger was meant to provide the LSE with additional scale to guard against encroaches in Europe from US rivals CME Group and Intercontinental Exchange. But the Refinitiv deal shows that LSE now sees its future as a global provider of stock quotes, analytics and other data used to develop new financial products and more accurately value different asset types to drive earnings and profits higher.

The emphasis on data comes as stock exchange operators face growing pressure on fees they generate from the buying and selling of stocks amid new competition and computerised trading. That suggests the LSE may be more willing to find common ground with the commission this time around to complete Refinitiv deal.

Write to Ben Dummett at and Anna Isaac at

This article was published by The Wall Street Journal

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