Deutsche Boerse may lower LSE merger shareholder approval levels

German shareholders due to vote on the merger on 12 July, which already has the backing of LSE shareholders.

Brexit: The London Stock Exchange’s $20bn merger with Deutsche Boerse now at risk — The deal between LSE and Deutsche Borse is still subject to regulatory approval Reuters

Deutsche Boerse will consider lowering the shareholder approval threshold for its proposed merger with the London Stock Exchange (LSE) from 75%.

While a final decision is expected on Monday (11 July), the German exchange said decision makers are looking at the potential for lowering the "minimum acceptance threshold with a view to enabling index funds to participate in the offer".

German shareholders are due to vote on the merger on Tuesday, which already has the backing of LSE shareholders.

Deutsche Boerse is concerned the threshold could be hard to reach without its index fund shareholders, which hold up to 15% of its shares. However, they will not be able to accept the offer until the minimum level of acceptances has already been reached.

The merger has already been approved by US and Russian authorities, but still needs approval from European Commission. If the merger goes through, it will create the world's biggest exchange by revenue; forecast to be in the region of €4.7bn (£4.1bn, $5.19bn) this year.

Both stock exchanges agreed £20bn merger earlier this year, but the Brexit vote has raised questions about how it should be implemented and where the merged entity's headquarters were likely to be.

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