London Stock Exchange share price: Group agrees tie-up deal with Deutsche Börse

on Mar 16, 2016
Updated: Oct 21, 2019

London Stock Exchange Group (LON:LSE) has agreed the terms of a merger with European peer Deutsche Börse. Under the terms of the deal, shareholders in the UK group would own 45.6 percent of the enlarged group.

**Highlights from the company statement:**
The board of directors of London Stock Exchange Group plc (“LSEG”) (the “LSEG Board”) and the management board of Deutsche Börse AG (“DBAG”) (the “DBAG Board” and together with the LSEG Board the “Boards”) are pleased to announce that they have reached agreement on the terms of a recommended all-share merger of equals of LSEG and DBAG to form the “Combined Group” (the “Merger”). The Merger will be implemented via the establishment of a new UK holding company (“UK TopCo”) which will acquire LSEG by way of a scheme of arrangement (the “LSEG Acquisition”) and will acquire DBAG by making a securities exchange offer to all shareholders of DBAG (the “DBAG Offer”). The LSEG Acquisition is governed by the City Code and the DBAG Offer is governed by the German Securities Acquisition and Takeover Act (Wertpapiererwerbs-und Übernahmegesetz, WpÜG) and applicable regulations supplementing it.
Under the terms of the Merger, LSEG Shareholders will be entitled to receive 0.4421 UK TopCo Shares in exchange for each LSEG Share and DBAG Shareholders will be entitled to receive one UK TopCo Share in exchange for each DBAG Share.
Assuming 100 per cent. acceptance of the DBAG Offer, the Merger will result in LSEG Shareholders owning 45.6 per cent. of UK TopCo and DBAG Shareholders owning 54.4 per cent. of UK TopCo on a fully diluted basis.
The Combined Group
UK TopCo is a public limited company incorporated in the UK. In addition UK TopCo will be managed in such a way that it will be resident solely in the UK for tax purposes. UK TopCo will seek a premium listing for its shares on the Official List and admission to trading on the main market of the London Stock Exchange and a prime standard listing for its shares on the Frankfurt Stock Exchange. It is envisaged that the UK TopCo Shares will be eligible for inclusion in the DAX, EuroSTOXX, and FTSE Russell index series.
LSEG in London and DBAG in Frankfurt would become intermediate subsidiaries of UK TopCo. The existing regulatory framework of all regulated entities within the Combined Group would remain unchanged, subject to customary and final regulatory approvals. LSEG and DBAG will continue to be subject to tax in their respective countries of incorporation.
The Combined Group will maintain its headquarters in London and Frankfurt, with an efficient distribution of central corporate functions in both locations. The newly formed holding company (UK TopCo) has been incorporated in the UK and will have a unitary board with equal representation from LSEG and DBAG, constituted in accordance with the UK Corporate Governance Code. LSEG will maintain a one-tier-board system, while DBAG will maintain a two-tier-board system subject to applicable co-determination rules. UK TopCo will use the euro as its reporting currency for the purposes of its accounts and other financial reports following Completion. The subsidiaries of UK TopCo will continue to use their existing reporting currencies for the purposes of their accounts and other financial reports.
As of 07:10 GMT, Wednesday, 16 March, London Stock Exchange Group Plc share price is 2,906.00p.

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