The London Stock Exchange Group merger with Deutsche Boerse could result in 1,250 job cuts as part of the combined companies’ €450 million cost-savings initiative.
However, over 200 new roles are expected to be created as a result of proposed growth initiatives, in addition to 350 new roles across the Combined Group through the use of Nearshore and Offshore locations.
LSE said in a recent filing that five years after completion of the merger it expects pre-tax revenue synergies of at least €250 million per annum, with around €160 million to be achieved by the third year.
“These anticipated revenue synergies are expected to arise as a direct result of the merger and could not be achieved independently,” the filing said.
On July 4 LSE shareholders are going to vote on the merger – this is just after the referendum on whether the UK should remain in the EU. The two companies have said that they will proceed with the merger regardless of the outcome.
The all-share merger will create Europe’s leading global markets infrastructure group and the largest exchange group by total income with a diversified revenue mix by product and geography. It will also enhance both London and Frankfurt as domestic and international financial centres.
The transaction, still subject to regulatory approval, is expected to be completed early next year.
“The strategic rationale for this merger is very clear. We firmly believe that this merger allows the shareholder substantial long-term growth through diversified and resilient revenue streams,” Carsten Kengeter, the chief executive of Frankfurt-based Deutsche Börse, was quoted by The Financial Times as saying.