EU antitrust regulators are asking customers and rivals of Deutsche Börse and Allfunds whether the German exchange operator’s purchase of the Amsterdam-listed fund platform would increase investment flows across Europe or simply concentrate too much power in one place. The European Commission must decide by November 27 whether to clear the deal, clear it with conditions, or open a full investigation.
Deutsche Börse has agreed to pay €8.80 per Allfunds share, made up of €6.00 in cash, 0.0122 new Deutsche Börse shares, and a permitted dividend of €0.20. That values Allfunds at about €5.3bn. The price represents a 32.5% premium to Allfunds’ close on the day before talks were announced and a 40.3% premium to its three-month volume-weighted average price. Hellman & Friedman and BNP Paribas have given irrevocable undertakings covering roughly 48.9% of the shares, and the Allfunds board has recommended the deal. Allfunds administers about €1.7trn of fund assets. Deutsche Börse expects around €60m of annual pre-tax cost savings and is targeting completion in the first half of 2027, subject to approvals. It is the largest acquisition in the company’s history.
What the Commission is testing
The questionnaire focuses on a few practical points. Regulators want to know whether the combination would increase cross-border fund investment inside Europe, such as Spanish investors buying Swedish funds, and whether wider distribution of UCITS funds outside the EU would bring more capital to European companies. They are also asking whether viable competitors exist and whether customers expect to pay higher fees for any benefits the deal delivers. Jefferies analysts warned in January that the Commission could open an in-depth review because the deal would combine Europe’s two largest business-to-business fund platforms. Deutsche Börse’s existing presence is through Clearstream Fund Services. The companies argue the businesses are complementary, Allfunds on distribution, Clearstream on custody and settlement, rather than direct rivals.
The Commission can clear the deal in phase one, clear it with remedies, or open a full investigation that typically lasts several months. A longer review would put pressure on the first-half 2027 timetable. Deutsche Börse chief executive Stephan Leithner has said the combination of Allfunds’ technical expertise with Clearstream’s capabilities would create a leading platform that better serves clients and supports the development of the European funds industry.
The case highlights a familiar tension in Brussels between wanting European champions and enforcing competition rules. Competition rules are designed to stop the two largest players in a market from merging. Customer responses to the questionnaire will largely decide which priority wins. The companies maintain the overlap is limited. Whether the Commission agrees by November 27, or decides it needs more time, will show how far those ambitions stretch when they meet the merger rules.
Author: Tejas Bansal
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