Deutsche Börse merger talks with Borsa Italiana break down

Frankfurt-based securities and exchange operator Deutsche Börse has pulled out of merger talks with Milan-based Borsa Italiana, after failing to agree on moves towards a joint venture.

Deutsche Börse signed a letter of intent to merge with the Milan-based exchange in October.

The Frankfurt-based exchange hoped the tie-up would entice Euronext – the Paris-based stock exchange which is on the brink of a merger with the New York Stock Exchange – to consider a three-way European merger instead.

Deutsche Börse this week published a statement on its website announcing the suspension of talks about a “joint approach for the consolidation of the European exchange landscape”.

The exchange stated: “It became clear in the course of the negotiations following the signing of a Letter of Intent that an agreement between the two parties on certain key issues was not achievable in the short term.”

A spokesman for Deutsche Börse said an important element in the breakdown of talks was the two exchanges’ failure to reach an agreement before the Euronext extraordinary general meeting in December. “We have been and continue to be an advocate of European exchange consolidation,” he said.

Deutsche Börse reported record sales and trading volumes in the third quarter of this year. Earnings before interest, tax and amortisation (EBITA) rose by 42% year-on-year to total €255 million in the third quarter, including an exceptional gain of about €24 million from the sale of 70% of Eurex US.