NYX Nyse Euronext

The planned tie-up of Deutsche Boerse AG (DB1.XE) and NYSE Euronext (NYX) is on track to receive the European Union's approval by year-end, a NYSE Euronext official told Dow Jones Newswires on Wednesday.

The European Commission, the executive arm of the EU, which has to assess whether the deal is compatible with EU antitrust rules, has set a provisional Dec. 13 deadline for the verdict.

The commission will hold a formal hearing on the proposed tie-up on Oct. 27, another person familiar with the matter told Dow Jones Newswires on Wednesday. That is in line with a recent comment by Duncan Niederauer, chief executive of NYSE Euronext and slated chief executive of the merged entity, that the merger partners are likely to request an open hearing to be held later this month as part of their response to the EU's statement of objections to the deal.

The second person familiar with the matter also said Deutsche Boerse and NYSE Euronext have returned a redacted version of the commission's formal statement of objections to the commission. Both parties had received the statement on Oct. 5.

The commission has three major objections against the combination of the two global exchange powerhouses, several people familiar with the matter told Dow Jones Newswires last week.

Sticking points center on the handling of derivatives--which the combined group would dominate in Europe--and the licensing of stock indexes. Competition authorities want the exchanges' combined derivatives clearing operations to be opened up to third parties, three people familiar with the matter told Dow Jones.

Third parties, such as competitors, customers, and securities issuers, who have requested access to the merger plan records will get to see a redacted copy or parts of the commission's statement of objections and can share their views with the commission within two weeks of receiving the redacted copy.

Two other people close to the matter said "interested parties" will have the chance to express their views at the hearing.

In the process, the two merger candidates will have to file remedy proposals to the objections with the commission, which will ask competitors whether they consider the remedies suitable. Prior to that, the remedy proposals will have to be approved by Deutsche Boerse's supervisory board, three people familiar with the matter said. A date for the extraordinary supervisory board meeting hasn't been set.

The biggest banks and brokers remain wary of the deal, despite promises from the exchanges that capital costs to trade will come down.

Deutsche Boerse and NYSE Euronext agreed to their $17.7 billion merger in February and won the backing of shareholders in July.

Approval by the EU antitrust authorities, which opened an in-depth probe in early August, is the biggest hurdle still facing the deal. Findings in the statement of objections are provisional and remain open for discussion.

-By Ulrike Dauer, Matt Dalton and Jacob Bunge, Dow Jones Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com

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