BRUSSELS (Dow Jones)-The proposed tie-up between exchange
operators Deutsche Boerse AG (DB1.XE) and NYSE Euronext (NYX) would
have "practically eliminated" market competition and remedies
proposed by the two companies "fell far short," the European
Union's antitrust chief, Joaquin Almunia, said Wednesday.
Earlier Wednesday, the EU, which had been considered the main
regulatory hurdle, blocked the merger plans, about a year after the
plans were first announced.
The commission's review of the plans "found ample evidence" that
both companies and their derivative exchanges --Eurex and Liffe--
"compare head to head and are each other's closest competitors,"
Almunia told reporters at the press briefing following the EU's
decision.
Almunia had argued the combined businesses would dominate
Europe's on-exchange derivatives trading, giving the proposed new
company a 93% market share in that region. He rejected requests by
the exchanges for the review to include derivatives that are traded
over-the-counter rather than only those on exchanges, which would
effectively reduce their total market share to below 15% in Europe
and below 4% worldwide. He also rejected calls by the exchanges
that the review should take into consideration that today's
derivatives market is a global market.
The review found that the two companies themselves "don't view
OTC products as competitors for the derivatives they trade," they
only consider each other as competitors, Almunia said.
-By Matthew Dalton, Laurence Norman and Ulrike Dauer, Dow Jones
Newswires; +49 69 29725 500; ulrike.dauer@dowjones.com