LONDON: The planned £21bn merger between the owner of the London Stock Exchange and Germany’s Deutsche Boerse could result in 1,250 job cuts across the combined group, it has been disclosed.
Plans for the cuts were outlined as the group set out how it aimed to achieve €250m (£194m) a year in cost savings five years after the tie-up, with the impact of the savings spread across both groups.
The London Stock Exchange Group – whose operations also include Italy’s Borsa Italiana – agreed the “merger of equals” with Deutsche Boerse in March. It will see shareholders in the German firm owning 54% of the combined company.
Plans for the merger have now been set out in a prospectus ahead of a vote by LSEG shareholders to be held on 4 July to approve the deal. The group said final details of job cuts were not yet known.
“However, according to current integration assessments, the boards believe that in order to achieve the aforementioned cost synergies… there could be an overall potential job reduction of approximately 1,250 existing roles across the combined group.”
But the prospectus added that hundreds of other job could be created elsewhere as a result of growth plans as well as moving jobs to new locations. Each firm employs more than 5,000 staff according to annual reports for 2015.
The tie-up creates one of the biggest exchange companies in the world, a large European operator capable of facing down tough competition from US and Asian rivals.
It comes after two abortive attempted tie-ups between the London Stock Exchange and Deutsche Boerse in 2000 and 2004. The LSE is one of the world’s oldest stock exchanges and can trace its history back more than 300 years.
The wider LSE Group was formed in October 2007 when the London Stock Exchange merged with Milan stock exchange Borsa Italiana.
It has since completed further deals including the £1.6bn takeover of US stock index Frank Russell.
