The European Commission has blocked the proposed merger between the London Stock Exchange and Deutsche Börse over competition concerns.

The news comes on the day that a letter signed by British Prime Minister Theresa May was delivered to European Council president Donald Tusk, triggering Article 50 and the start of the UK’s formal withdrawal from the EU.

The commission's investigation concluded the merger would have created a de facto monopoly in the markets for clearing fixed income instruments and so has prohibited the merger under the EU Merger Regulation.

The proposed merger would have combined the activities of the two largest European stock exchange operators who between them own the stock exchanges of Germany, Italy and the UK, as well as several of the largest European clearing houses.

Commissioner Margrethe Vestager, in charge of competition policy, said: “The European economy depends on well-functioning financial markets. That is not just important for banks and other financial institutions. The whole economy benefits when businesses can raise money on competitive financial markets.

“The merger between Deutsche Börse and the London Stock Exchange would have significantly reduced competition by creating a de facto monopoly in the crucial area of clearing of fixed income instruments. As the parties failed to offer the remedies required to address our competition concerns, the commission has decided to prohibit the merger.”

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