London Stock Exchange and Deutsche Boerse agree merger

The tie-up will create one of the largest exchange companies in the world with a combined value of about £21 billion, according to BBC.

Under the terms of the deal, LSE shareholders will own 45.6% of the new holding company, while Deutsche Boerse shareholders will own 54.4%.

LSE chief executive Xavier Rolet said the two firms were "creating an industry-defining combination," according to BBC.

The two companies said together they should be able to make cost savings of EUR 450 million a year, about 20% of the combined group's operating costs of EUR 2.2 billion last year, according to the report.

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The two exchanges said the "combination of London, Frankfurt and Milan will provide a platform for financing and promoting economic growth of European companies and be an attractive offering to Asian and US companies looking to access investors and capital".

The newly-merged company will keep both the London and Frankfurt headquarters. The new holding company, UK TopCo, will be incorporated in the UK, according to the report.

The merger is expected to be completed by the end of this year or early next year.