PARIS/FRANKFURT European competition authorities are ready to block the $9 billion merger of NYSE Euronext NYX.N and Deutsche Boerse DB1Gne.DE unless the companies agree to new asset sales, Le Monde newspaper reported on Tuesday.
EU regulators met the exchanges at a meeting on Tuesday and discussed whether rivals and users felt that their proposals addressed competition concerns.
If the feedback is negative, it would be up to the companies to offer more substantial concessions or run the risk of the European Commission blocking the merger.
In New York, Chief Operating Officer Lawrence Leibowitz of NYSE Euronext said the two exchanges continue to believe the merger remains compelling and that failure to approve the deal would be a mistake.
"We will not undermine the strategic logic of this deal by divesting key assets," Leibowitz said in a speech to a conference on equity markets on Tuesday.
Le Monde said the authorities currently consider that the merger would lead to a duopoly on the European derivatives market and in the clearing business.
A person close to Deutsche Boerse said that it is premature to conclude anything has passed or failed in terms of regulatory approval.
"Negotiations are ongoing, and we're still in the process of bluff and counterbluff," the source who is familiar with the company's thinking said.
A spokesman for Deutsche Boerse said the article was "highly speculative" and declined to comment. A spokeswoman for NYSE Euronext in Paris declined to comment.
Deutsche Boerse shares extended losses and were down 1.7 percent at 44.19 euros by 1345 GMT, slightly underperforming a 1 percent weaker STOXX Europe 600 Financial Services index .SXFP. NYSE Euronext shares rose 0.4 percent to $28.38.
(Reporting by James Regan, Foo Yun Chee, Harro ten Wolde and Edward Taylor and Herbert Lash; Editing by Maria Sheahan and Richard Chang)