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5th July 2011

Mood music for LSE / Nasdaq merger?

Several media reports suggest that Xavier Rolet, London Stock Exchange Group Chief Executive, would be willing to enter serious talks regarding a merger with Nasdaq OMX. The reports would appear to suggest some deliberate briefing to this effect from the LSEG. Reports stress the two CEOs have not talked directly giving the option of denyability if necessary later. Rolet's predecessor, Clara Furse, fought off many acquisition attempts during her term in office including one from Nasdaq. She often did so whilst refusing to have any face to face discussions with the suitors.


The two organisation both have almost identical market values with the LSEG at £2,836m ($4,540m) and Nasdaq at $4,618m (£2,885m) as of Monday late morning London time, therefore before markets opened in the US. Both are close to their 52 week highs also.


Each is already a holding company with individual exchanges below that level, regulated by their local country regulator. Regulators both sides of the Atlantic are likely to insist on certain safeguards should an LSEG / Nasdaq deal be proposed . This would take time to negotiate however it would seem unlikely that the regulators would ultimately block a deal.