“Merger of Equals” Agreed by London Stock Exchange, Deutsche Börse
Creation of exchange powerhouse agreed, deal expected to be completed by end of year or early 2017.

Under the terms of the "industry-defining merger" a new London-domiciled holding company, UK TopCo, has been established. Deutsche Börse shareholders will own 54.4 percent of the combined entity, with LSE shareholders holding the remaining 45.6 percent, led by current Deutsche Börse chief executive Carsten Kengeter. LSE chief executive Xavier Rolet will step down upon completion of the deal, which is expected to occur either by the end of 2016 or early 2017.
Despite interest from rival suitors and the ongoing uncertainty of the UK's involvement in the European Union, Kengeter highlighted the pan-European collaborative advantages for the newly-formed exchange group. The two firms estimate that the deal will lead to cost savings of nearly $500 million (€450 million) per year, via "technology-enabled efficiencies, removing duplication in the corporate center and business segment optimization".
"Strengthening the link between the two leading financial cities of Europe, Frankfurt and London, and building a network across Europe with Luxemburg, Paris and Milan will strengthen European capital markets," said Kengeter in a statement. "It is the logical evolution for our companies in a fundamentally changing industry. As a combined group we will create a European player that will compete on a global basis."
Last week Deutsche Börse announced it is selling International Securities Exchange (ISE) to Nasdaq for $1.1 billion as the group seeks to reorganize its portfolio and raise capital for the LSE merger.
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