FRANKFURT (Reuters) - Germany's Deutsche Boerse DB1Gn.DE aims to keep its derivatives trading and settlement operations in Frankfurt after its planned $30 billion (20.6 billion pound) merger with LSE Group LSE.L, its chief executive said.
The group that would result from the merger will need a mainstay in the euro zone, CEO Carsten Kengeter said at a conference with bankers and politicians late on Tuesday.
“That’s why Eurex Clearing and Clearstream Banking Frankfurt will remain central structures and always stay there,” Kengeter said.
LSE Group and Deutsche Boerse said last month their planned merger was on track and steadily winning support, despite a looming UK vote on continued membership in the European Union (EU).
Both companies have been working intensively on preparations to obtain all regulatory approvals since unveiling their plan in February to create the world’s biggest exchange by revenue, Kengeter said on April 27.
But bankers and politicians in Frankfurt are concerned the tie-up could undermine Germany’s financial centre, citing the planned seat of the merged group in London and a possible UK exit from the EU.
Britain, home to Europe’s biggest financial centre, votes on June 23 on whether to remain in the bloc. Any vote in the referendum to leave the EU could create major uncertainty for the country’s financial services industry.
Separately, CEO Kengeter said he expects a growing number of listings on the Frankfurt stock exchange in the wake of the merger.
Companies in Germany's blue-chip DAX .GDAXI index would benefit from greater equity capital as much as start-up firms and family-owned businesses, Kengeter said, noting there were four times more IPOs in London last year than in Frankfurt.
“Creating direct access to capital from London will promote and stimulate initial public offerings (IPOs) in Frankfurt,” Kengeter said.
Reporting by Andreas Kroener; writing by Andreas Cremer; editing by David Clarke and Mark Trevelyan
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