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Friday, June 3, 2016, Jaistha 20, 1423 BS, Shaban 26, 1437 Hijri

World Market And Commodity News
Deutsche Boerse, LSE flag 1,250 job cuts in tie-up
Published :Friday, 3 June, 2016,  Time : 12:00 AM  View Count : 23
FRANKFURT, June 2: Deutsche Boerse and the London Stock Exchange said Wednesday that around one in 10 jobs would go after their planned merger with the cuts helping bring 450 million euros ($500 million) in cost savings every year.
The operators of the Frankfurt and London stock exchanges are planning to seal their tie-up to create one of the world's biggest players in July.
Under the agreed terms, Deutsche Boerse shareholders will end up with 54.2 per cent of the new holding company's capital, and LSE shareholders with 45.8 per cent.
In a prospectus recommending the tie-up, the two companies said they estimate "pre-tax cost synergies of approximately 450 million euros per annum in the third year" following the merger.
"The boards believe that in order to achieve the ... cost synergies in the third year after completion (of the merger), there could be an overall potential job reduction of approximately 1,250 existing roles across the combined group," added the companies, which currently have a combined workforce of just over 10,000.
They also expect the merged company to deliver pre-tax revenue growth of at least 250 million euros annually from the fifth year, including 160 million euros by the third year after the deal is completed.
To do so, the combined group plans to enlarge its geographic footprint, including boosting its businesses in North America and Asia.
The companies had earlier revealed that they will become intermediate subsidiaries of the combined group, which will have headquarters in both London and Frankfurt, and that the board would have "equal representation" from both sides.
It will be headed by Deutsche Boerse chief Carsten Kengeter.
Shareholders are asked to vote on the planned merger in July.
But the deal has still to be approved by the EU, with some observers suggesting that the individual strengths of both companies in some derivatives could pose a problem.
Kengeter has said one "should not count on a completion of the deal before the first quarter of 2017".
The planned tie-up -- also the group's third attempt at merging -- also comes at a politically sensitive time as Britain is due to hold a referendum on June 23 to determine whether it remains in the European Union.
Both stock exchange operators insist however that the merger will succeed irrespective of the outcome of the Brexit vote.    ?AFP

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