Almunia sets out case for Deutsche Boerse-NYSE veto

(BRUSSELS) - EU competition commissioner Joaquin Almunia said Wednesday that the decision to block a planned tie-up between the Frankfurt and New York stock exchanges was made purely with regard to underlying European economic fundamentals.

The European Commission confirmed its widely-anticipated veto on the proposed deal after Frankfurt-based Deutsche Boerse and transatlantic NYSE Euronext trumped the EU's announcement in Brussels, confirming their plans were now dead and slamming a "dark day" for Europe.

Almunia told a press conference at the headquarters of the EU executive that he had "no alternative" on the issue.

EU markets commissioner Michel Barnier had raised some queries in public but in the end, the full Commission passed the decision without holding a vote, Almunia said.

Saying the two companies were the only "true competitors" in the key derivatives market that lay behind his concerns, Almunia insisted: "We could only have allowed a merger if the parties had offered sufficient remedies.

"Unfortunately they only offered remedies limited in their scope."

He added: "In the end, we had no alternative other than to prohibit the merger."

A Commission statement spelled out that the decision came down to the relationship between two subsidiaries of the two companies -- Eurex, operated by Deutsche Boerse, and Liffe, operated by NYSE Euronext.

As the two largest exchanges in the world for financial derivatives based on European underlying assets, it said the proposed merger "would have eliminated this global competition and created a quasi-monopoly in a number of asset classes."

This, they said, would have led to "significant harm to derivatives users and the European economy as a whole."