Deutsche Boerse has lost appetite for Euronext takeover - sources

FRANKFURT Wed Jan 9, 2013 10:28am GMT

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FRANKFURT (Reuters) - Germany's Deutsche Boerse (DB1Gn.DE) has lost its appetite for pursuing Euronext, even though the operator of the Paris, Amsterdam and Brussels stock exchanges is back on the block, three people familiar with the Frankfurt-based company's thinking told Reuters.

Regulatory and technological changes have made it harder to earn big profits from stock trading, taking the edge off Deutsche Boerse's decades-long dream of consolidating the European stock exchange landscape.

Since 2003, Deutsche Boerse made three attempts at combining with Euronext, all of which proved unsuccessful.

"The attractiveness of the shares trading business has massively diminished," a high ranking Deutsche Boerse manager, who declined to be named, told Reuters.

Deutsche Boerse declined to comment.

NYSE Euronext's European stock market businesses is set to be split off following IntercontinentalExchange's (ICE.N) $8.2 billion takeover of Euronext's parent company NYSE Euronext NYX.N.

Shares trading currently makes up only 10 percent of Deutsche Boerse's earnings before interest and taxes (EBIT), and margins and market share have suffered due to the European Union's markets in financial instruments directive (Mifid), which was introduced in 2007.

Mifid removed an obligation to trade shares only on regulated exchanges, making it easier for non-exchange competitors like banks and alternative investment businesses to muscle in on Deutsche Boerse's market share.

(Reporting by Edward Taylor and Andreas Kroener)

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