LSE merger with Deutsche Börse likely to result in 1,250 job cuts

London Stock Exchange

Mostly affecting technology roles.

The planned £20bn merger between the London Stock Exchange and Deutsche Börse, which is set to create the world’s biggest exchange group, is likely to result in 1,250 job cuts.

The prospectus issued to shareholders said the cuts would be necessary to achieve planned cost savings of €450m (£350m) by the third year after completion of the deal. At the same time, more than 550 new jobs could be created as a result of anticipated revenue growth and the use of offshore locations.

A spokesman for the LSE said the job losses would be spread between Frankfurt, London and other international locations over the next three years and would mostly affect technology roles, with the aim to achieve them through “natural wastage” – as people retire or leave.

The two companies said the deal would create the world’s biggest exchange group by income, enhancing London and Frankfurt’s standing as domestic and international financial centres and increasing the combined company’s global footprint by create a platform for future growth in Asia and North America.

The new company, which will be incorporated and resident in the UK for tax purposes, will be run by Deutsche Börse boss, Carsten Kengeter, who is to become chief executive. The LSE’s chair, Donald Brydon, will be chair of the merged group.

The prospectus said: “The outcome of the United Kingdom referendum on membership of the European Union is not a condition of the merger.”

The deal is expected to result in extra revenues of €160m in the third year after completion, rising to €250m a year in the fifth year. To achieve them, the companies have pencilled in a one-off cost of €100m.

LSE shareholders will be asked to approve the merger at a meeting on 4 July. Deutsche Börse shareholders can tender their shares from Wednesday until 12 July.

The planned deal marks the third time Deutsche Börse and LSE have tried to merge, after previous attempts at a tie-up failed in 2000 and 2005.

Powered by Guardian.co.ukThis article was written by Julia Kollewe, for theguardian.com on Wednesday 1st June 2016 15.03 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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