German watchdog approves Deutsche Boerse-NYSE deal

The outside of the New York Stock Exchange is seen in New York May 13, 2011.

FRANKFURT/NEW YORK (Reuters) - A German supervisor approved Boerse AG's (DB1Gn.DE) planned $9 billion buyout of NYSE Euronext (NYX.N), the companies said on Monday, marking another step toward sealing the deal just as talks with European authorities intensify.

Germany's Financial Supervisory Authority (BaFin) cleared another hurdle in the process, which is still expected to be completed by the end of this year.

"With BaFin's decision, the merger has reached an important regulatory milestone in Germany," the Frankfurt exchange operator said, adding it still needed approval from EU competition authorities, as well as from exchange supervisory authorities.

The approval comes days after Reuters reported the European Commission would not impose serious antitrust restrictions on the takeover because, according to sources, its regulatory and antitrust arms had struck a deal.

Citing documents leaked in recent weeks, Reuters reported the EC deal would allow the merger to proceed without serious restrictions, on the understanding that new rules dealing with clearing, indexes and data will force competition on the combined group.

The European commission is set to outline these principles in October when it proposes broad reforms to its 2007 markets in financial instruments directive, or Mifid.

Both exchanges as well as a spokeswoman for European Competition Commissioner Joaquin Almunia denied the existence of such a deal.

"We are aware of no such deal and we are proceeding as before along the normal path," NYSE's Chief Operating Officer Lawrence Leibowitz said at a conference hosted by Barclays in New York.

Amelia Torres, spokeswoman for Almunia, said on Saturday: "The Commission's investigation of the merger continues and the time (of) whether or not to send the companies a Statement of Objections has not yet come."

At the same time the BaFin approval could be an indication things are moving in the direction of an approval by the European Commission.

Deutsche Boerse agreed to acquire the New York Stock Exchange parent in February, the largest in a wave of planned deals among global bourses. Although the companies expect the merger to close by year end, the combination of Europe's main futures venues Eurex and Liffe faces a tough antitrust review.

A spokesman for Deutsche Boerse said on Monday there was no change to the timeline for the expected completion of the deal.

NYSE Euronext shares slipped about 1 percent to close at $25.42 in New York, while Deutsche Boerse shares fell 2.5 percent in Frankfurt.

(Reporting by Harro ten Wolde in Frankfurt, Jonathan Spicer in New York and Julien Toyer in Brussels; editing by Hans-Juergen Peters and Andre Grenon)