The EU regulator voted against the plan of Deutsche Börse and of NYSE Euronext to create the largest stock market in the world, after concluding that the merger would hurt competition, Bloomberg reports.
The deal would have led to a "quasi-monopoly" of derivatives traded on the European market, the European Commission announced yesterday, and it went on to say: "Any return on this deal would not be enough to counter the damage caused to consumers following the merger".
The EU blocked the merger amid fears that the resulting entity - which would lead to more than 90% of the derivatives market in Europe - would make competition far too difficult for new players, according to the Chicago Tribune.
In February last year, Deutsche Börse announced it wanted to take over its New York rival in a deal valued at 9.5 billion dollars. Since then, the value of the deal fell to 7.3 billion dollars, as the stock of Deutsche Börse depreciated. The companies appealed directly to commission President Jose Barroso last month to try to salvage their merger, arguing that an EU ban would harm European exchanges and drive business to other parts of the world.
"This is dark day for Europe and for its future competitiveness on the global financial markets", the officials of Deutsche Börse said yesterday, and they went on to say: "The decision of the EC is based on an unrealistically narrow definition of the market, which does not reflect the global nature of the competition on the derivatives segment. As such, we consider the decision to be a mistake".
The acquisition of NYSE Euronext by Deutsche Börse would have put more than 90% of Europe's exchange-traded derivatives market and about 30% of stock trading in the hands of one company.
"Even though I saw the merger as a way of accelerating our plans, our existing business model was always at the core of our