Germany's Deutsche Boerse said Tuesday it will sue the European Union's competition regulator over its decision to block the company's $10 billion merger with NYSE Euronext.
Deutsche Boerse AG said it considers the decision by the European Commission to block the deal to be "faulty" on several aspects and will take its complaint to a European court in Luxembourg. It did not specify what aspects of the Commission's ruling it was objecting to.
The merger of Deutsche Boerse and NYSE would have created the world's largest exchange operator but the Commission blocked the deal on Feb. 1. It argued that the combination of Deutsche Boerse's Eurex and NYSE's Liffe derivatives exchanges would have given the company a dominant position in the market for exchange-traded derivatives. Derivatives are complex financial instruments that allow investors to bet on changes in many areas, including interest rates, stock indexes or the price of oil.
Though no reason for the referral was offered, officials from the two companies have said in the past that the regulator should have used a broader definition of the derivatives market for its decision. The vast majority of derivatives are not traded on exchanges like Liffe or Eurex, but bilaterally between banks and other investors. NYSE and Deutsche Boerse argued that the Commission should have included such over-the-counter trades in its assessment of the merger, as well as competition from non-European exchanges.
A spokesman for the Commission said Tuesday that the regulator stood by its decision and would defend it in court.
"It was the right decision because this merger, if it had taken place, would have created a monopoly on a global market," said Antoine Colombani. "And this would have harmed the thousands of companies which use these products (derivatives) to hedge their risks."
Gabriele Steinhauser contributed to this story.