Article / 27 July 2016 at 10:21 GMT

Deutsche Boerse Q2 report due as HQ dispute rages

  • Frankfurt, London stock exchanges announced merger plans earlier this year
  • HQ of the new German-British entity to be in London
  • Concern over moving largest EU stock exchange outside the union is increasing
  • Shareholders back merger plan, but with small majorities
  • Today Deutsche Boerse will come out with its Q2 results
Still standing in Frankfurt: Bull in front of the local stock exchange, run by Deutsche Boerse. Photo: iStock
By Clemens Bomsdorf

Sometimes going against the trend is a good idea and pays off. But it can also be risky, particularly if such moves are undertaken in the spotlight and are disliked by large parts of society. The move by Deutsche Boerse, Germany’s stock exchange, is currently square in the middle of both categories. 

With large corporations as Easyjet and Vodafone thinking about moving their headquarters out of the UK (read reports in the WSJ here and the Guardian here) what Deutsche Boerse is undertaking right now is clearly counter to the trend. 

The hitherto Frankfurt.based German exchange wants to merge with the London Stock Exchange and move its headquarters to the British capital. 

Deutsche Boerse weekly chart (click to enlarge), see end of article for LSE chart
Deutsche Borse weekly chart
Source: Saxo Bank. Create your own charts with Saxo Trader click here to learn more 

A (relatively small) majority of shareholders of both corporations have so far said yes to the deal. Yesterday, Deutsche Boerse announced that 60.35% of its shareholders have accepted the exchange offer. That is well above the 50% that is legally necessary, but far below the 75% Deutsche Boerse originally had aimed for. But the stock market regulator and the EU commission still have to give their permission.

The planned merger announcement, which was made ahead of the Brexit referendum, but with full knowledge of it taking place, has already been criticised before it became clear that the UK is on track to leave the EU. This criticism has increased sharply since then with the main reason being the relocation of the headquarters to London. 

That was planned despite the fact that former Deutsche Boerse shareholders would hold the majority of the new entity.

bafin Hufeld

Felix Hufeld, head of the German Federal Financial Supervisory Authority Bafin, is not amused about the plans to locate the HQ of Europe's largest stock exchange outside the EU. 
Photo: Bafin
“It is hard to imagine that the most important stock exchange venue within the Eurozone is steered from outside the EU,” said Felix Hufeld (see, for example, this media report from Manager Magazin and also this one by Handelsblatt Global), head of Bafin, the Federal Financial Supervisory Authority, earlier this summer. 

He added that a readjustment would be necessary. 

Although Bafin cannot veto the decision, Huefeld is somebody people listen to in such cases. Also, the local stock market regulator of the federal state of Hesse, where Frankfurt is located, might listen to him and share the local government’s concern. 

The head of the government as well as the minister for economics have expressed their doubts whether a move to London is a good idea. Even the head of Deutsche Boerse’s board as well as the work council are critical of the planned move.

LSE Group weekly chart (click to enlarge), see above for Deutsche Boerse chart
LSE weekly
Source: Saxo Bank.
— Edited by Michael McKenna

Clemens Bomsdorf is a consulting editor at


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