Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC’s prohibition of NYSE Euronext, Deutsche Börse merger upheld, (Mar 9, 2015)
Organizations Mentioned:Deutsche BÖrse AG | Eurex Deutchland | NYSE Euronext | New York Stock Exchange, Inc.
By Greg Hammond, J.D.
The General Court of Europe dismissed on March 9, 2015, an appeal of a European Commission decision, prohibiting the proposed merger of NYSE Euronext and Deutsche Börse AG, competitors in the European financial derivatives market. The court agreed with the EC’s finding that the proposed merger would have led to a near-monopoly (Deutsche Börse AG v. European Commission, Case No. T175/12).
The EC assessed the proposed merger’s effects on competition in the European interest rate, single stock equity, and equity index derivatives markets. Deutsche and NYSE compete in these markets through their derivatives exchanges, Eurex and Liffe, respectively. The EC found in February 2012 that the purported over-the-counter derivatives were not a competitive constraint, but that Eurex and Liffe compete head-to-head and are each other’s closest competitors for European financial derivatives. Consequently, the EC concluded that the merger would create a near-monopoly in these markets, and it would have eliminated one of the closest sources of potential competition. Lastly, the EC determined that any supposed efficiencies from the proposed merger would not outweigh the harm stemming from the monopoly, and any proposed remedies would be insufficient.
The General Court affirmed the EC’s findings, holding that the EC correctly concluded that the over-the-counter derivatives were not in the same market as exchange-traded derivatives, and that the merger would have created a near-monopoly. The court also found that the EC correctly determined that the efficiencies were not sufficient to outweigh the harm that would be caused from the transaction, and correctly demonstrated that any remedies submitted were inadequate. The appeal was therefore dismissed, and Deutsche Börse AG was required to bear its own costs and to pay those incurred by the EC.
Companies: Deutsche Börse AG; NYSE Euronext
News: AcquisitionsMergers Antitrust