NYSE-DB lobby in Europe to save deal: source

NEW YORK/FRANKFURT Tue Jan 10, 2012 6:20pm EST

Experts work at their screens in the NYSE Euronext cash markets operations room at the transatlantic stock market operator responsible for the proper functioning of the Paris, Brussels, Amsterdam and Lisbon stock markets in Paris August 19, 2011.          REUTERS/Philippe Wojazer

Experts work at their screens in the NYSE Euronext cash markets operations room at the transatlantic stock market operator responsible for the proper functioning of the Paris, Brussels, Amsterdam and Lisbon stock markets in Paris August 19, 2011.

Credit: Reuters/Philippe Wojazer

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NEW YORK/FRANKFURT (Reuters) - Deutsche Boerse and NYSE Euronext have launched a lobbying effort in Europe to save their $9 billion merger, as European antitrust regulators made it clear they would recommend the deal be blocked, a source familiar with the situation said on Tuesday.

European Commission antitrust chief Joaquin Almunia and the case team plan to make the recommendation to the so-called college of 27 commissioners, who are expected to meet early next month to decide on the fate of the deal, the source said.

The antitrust staff's move, which NYSE and Deutsche Boerse had been expecting since at least late last month, places the deal to create the world's largest exchange operator on the brink of collapse.

The takeover of NYSE Euronext, announced in February last year, capped a wave of bourse merger plans globally. Most other proposed transactions in the global exchanges industry, including bids by the LES, Singapore Exchange Ltd and Nasdaq OMX Group, have since failed.

NYSE and Deutsche Boerse plan to meet with the commissioners as well as senior government officials in various European countries in the coming days to make their case and persuade the commissioners to overturn the staff's recommendation, the source said.

Deutsche Boerse Chief Executive Reto Francioni and his NYSE Euronext counterpart, Duncan Niederauer, also plan to go to the World Economic Forum meeting in Davos, Switzerland, and use the meeting of influential business leaders and politicians on January 25-29 to press their case, a second source familiar with the matter said.

The exchange operators plan to raise issue with how the European antitrust case team defined the derivatives market in coming to its decision, the first source said.

They plan to point out that any analysis of the impact on competition from their deal should look at the derivatives market as global rather than just European, and include the over-the-counter market, the source said.

The European Commission has demanded that Deutsche Boerse and NYSE sell either the Eurex derivatives arm or Liffe, a move that both exchanges have ruled out so far.

Reuters reported last month that European Commission antitrust officials showed no sign of being swayed by last-ditch arguments to save the deal.

A spokesman for the European Commission said: "The decision concerning this proposed merger is due to be taken by the Commission before February 9. Until the decision is taken, we cannot comment, confirm and/or deny anything."

NYSE Euronext said it has not yet received an official decision by the European Commission.

Deutsche Boerse on Tuesday said: "Deutsche Boerse and NYSE Euronext have not received yet any decision by the European Commission regarding the requested merger of both companies. The Commission has announced that it will make its final ruling on whether to clear the proposed merger by February 9, 2012. As a matter of policy, we cannot comment on speculation."

The news of Almunia's plan was reported earlier by the Financial Times.

(Reporting By Edward Taylor in Frankfurt, Paritosh Bansal in New York, and John O'Donnell and Illona Wissenbach in Brussels; Editing by Jon Loades-Carter and John Wallace)

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