Despite the outcome of the EU referendum, London Stock Exchange shareholders have overwhelmingly approved the planned merger with Deutsche Boerse by a 99.89 % majority.
The vote, which took place at the London Stock Exchange General Meeting, was expected to result in an approval. However, prior to confirming the merger, it will now have to be approved by German regulators as well as the Federal Government of Hesse, where Deutsche Boerse is currently headquartered.
The planned agreement foresees a merger between equals, with the new €20bn stock exchange to be headquartered in the UK. However, sources among German regulator Bafin and the Federal Government of Hesse have already raised concerns given the impending exit of Britain from the EU.
Bafin president Felix Hufeld warned earlier that it was hard to imagine the most important exchange venue in Europe to be based outside the Eurozone, as the Financial Times reported. While Bafin does not have a veto right on the decision, it will have to be approved by the Federal government of Hesse.
At a press conference immediately following the UK referendum on EU membership, Tarek Al-Wazir, economics minister for the Federal Government of Hesse warned that as a result of the referendum investment decisions would have to be reconsidered and that Frankfurt could soon take over the role as key trading center in Europe.
With regard to the planned merger, Al-Wasir stressed that the outcome of the referendum will be taken into account when making a decision on the planned merger.