Deutsche Boerse down 5% amid European Commission antitrust investigation🚩

The European Commission has launched an antitrust investigation against stock exchange operators Deutsche Börse (DB1.DE) and Nasdaq (NDAQ.US) over allegations of collusion in the listing, trading, and clearing of financial derivatives.

• In pre-market trading in the U.S., Nasdaq shares are down nearly 1.5%, while Deutsche Börse’s stock fell from around EUR 216 to roughly EUR 200 following the announcement; since then, the price has recovered a significant part of the decline.
• Investigators will examine whether the two institutions coordinated their activities in the listing, trading, and clearing of derivatives within the European Economic Area, potentially restricting competition.
• According to the European Commission’s statement, the probe focuses on suspected “coordinated behavior”, which may have involved market sharing, price coordination, or the exchange of commercially sensitive information between Deutsche Börse and Nasdaq. If confirmed, such practices would represent a serious breach of EU competition law.
• The Frankfurt Stock Exchange is Germany’s most important trading venue and one of the key pillars of the European capital market. Any potential violation of antitrust rules could have a significant impact not only on the company itself but also on the stability and transparency of the European financial system.
• According to available information, EU competition authorities have been monitoring Deutsche Börse since autumn 2024, and raids were conducted at the company’s offices in September 2024 as part of a preliminary investigation.
• If the allegations prove true, the exchange operator could face fines of up to 10% of its global annual revenue — which, given its current scale of operations, would amount to several hundred million euros.
• For institutional investors and listed companies using the Deutsche Börse and Nasdaq infrastructure, this development signals a renewed rise in regulatory risk across Europe’s exchange sector.
• The pace of the proceedings, any interim findings by the Commission, and responses from national regulators will be key factors for investors to monitor. The case fits into a broader EU trend of tightening oversight over major market operators and reducing the dominance of a few large exchange groups in Europe, where the long-term vision could involve the creation of a single, pan-European exchange through a merger of Euronext, Deutsche Börse, and smaller entities.

Deutsche Börse’s stock has been under pressure for some time, down nearly 30% from its all-time highs — one of the sharpest declines in the company’s history. Its P/E ratio remains around 20, roughly in line with historical averages. A potential fine of 10% of annual revenues could amount to roughly EUR 700 million, which could reduce net profit by around EUR 200 million, assuming the company maintains a net margin of approximately 30%. In the past year, Deutsche Börse’s revenue grew by nearly 15% year-over-year.

Source: xStation5