DOJ Blesses Major Merger

The London Stock Exchange (LSEG) is in the process of merging with Refinitiv.

LSEG, headquartered in London, operates the London Stock Exchange, the Italian stock exchange, Borsa Italiana, and several other trading platforms for trading of stocks, other equity-like exchange traded products, bonds and derivatives.

Suneel Bakshi, Chairman, LSEG
Suneel Bakshi, Chairman, LSEG

“Serving more than 40,000 institutions in approximately 190 countries, Refinitiv provides information, insights and technology that drive innovation and performance in global financial markets.” Refinitiv states on its website. “Our heritage of integrity enables our customers to make critical decisions with confidence while our best-in-class data and cutting-edge technologies enable greater opportunity.”

The merger is so significant and complex that regulators all over the globe are taking a look.

In June, the European Commission (EC) issued a statement on the merger. Here is part of their press release.

“The European Commission has opened an in-depth investigation to assess the proposed acquisition of Refinitiv by the London Stock Exchange Group (‘LSEG’) under the EU Merger Regulation.” The EC said in a press release. “The Commission is concerned that the proposed acquisition may reduce competition in trading and clearing of various financial instruments and in financial data products.”

EC Executive Vice-President Margrethe Vestager, responsible for competition policy, said: “Financial markets provide an essential function for the European economy. Access to financial market infrastructure and financial data products is needed to make investment decisions, trade, and to protect savings. We have opened an in-depth investigation to assess whether the proposed transaction which will combine the activities of LSEG and Refinitiv would negatively affect competition in these markets. It is key for a well functioning financial market to ensure that market participants continue to have access to financial market infrastructure and financial data products on competitive terms.“

In the US, the US Department of Justice’s Anti-trust Division has been looking at the merger, and on Friday, they issued a statement giving their approval.

Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the division’s investigation into the proposed acquisition of Refinitiv by the London Stock Exchange Group (LSEG):

“After an extensive review of the proposed transaction, the Antitrust Division determined that the combination of LSEG and Refinitiv is unlikely to result in harm to competition or American consumers.”

In the US, anti-trust is governed primarily by the Sherman Anti-Trust Act, which was passed in 1890. The act regulates monopolies and other anti-competitive behaviors.

Mergers which are deemed anti-competitive can be blocked.

Reuters recently reported that LSEG is exploring sell part or all of its Italian division if necessary to get the merger approved.