London Stock Exchange and Deutsche Börse agree £21bn merger

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Germany’s Deutsche Börse and the London Stock Exchange have agreed to merge in a deal that will create a European giant worth over £21 billion.

The combined group, which is yet to be named, will be based and listed in London.

Chairman, the LSE's Donald Brydon, and chief executive, Deutsche's Carsten Kengeter, will also run the company from the capital.

The so-called “merger of equals” will leave Deutsche shareholders with about 54 per cent of the new firm's shares, while LSE investors will hold 46 per centt.

The agreement comes 16 years after the pair first attempted a tie-up. It brings together the LSE's strength in share-trading with Deutsche's Eurex derivatives trading arm in what they deemed a “highly complementary combination”. They expect to make around £353 million worth of cost savings a year through the deal.

US exchange groups, including New York Stock Exchange owner International Exchange (ICE) and CME Group, which owns the Chicago Mercantile Exchange, were also said to be considering a tilt at the LSE, but neither has confirmed an interest.

The LSE's current chief executive Xavier Rolet said he will leave the new firm after a year but plans to stay in Britain.

He said he will leave the LSE in a “safe, globally relevant place without the mistakes of the past”.