Deutsche Borse chief Reto Francioni made public his intentions to resume talks with Euronext about a possible merger, but warned that the conditions of the alliance would be stringent.
Francioni’s announcement came after Deutsche Borse reported record earnings, lifting Germany’s stock-exchange operator into better bargaining position with net profits rising 61% to EUR427.4 million from EUR266.1 million in 2004.
“A combination of Deutsche Borse and Euronext is by far the most attractive among a large number of relevant options,” Francioni, 51, said in a statement. “Deutsche Borse intends to take a fundamentally pragmatic approach to consolidation without giving up material parts of its business portfolio.”
The merger talks earlier this month stalled after the two exchanges failed to agree on the handling of management, ownership and technology issues of a single body. The German bourse favors the vertically-integrated model, in which trade execution and post-trade clearing and settlement are housed under one of the roof.
Deutsche Borse has already said it would keep its lucrative clearing-and-settlement business, which would be based in Frankfurt, but Francioni proposed the rest of the operations would be divided between Deutsche Borse and Euronexts existing locations to create a “fair balance.”
Both Deutsche Boerse and Euronext have expressed interest in taking over the London Stock Exchange (LSE), but the deal fell apart for Deutsche Borse after preliminary offer of ₤1.4 billion. Euronext, which comprises of the Paris, Amsterdam, Brussels and Lisbon stock markets, is still thought to be considering a move for the London exchange.