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Deutsche Boerse, NYSE extend merger deadline to sway Europe

By Luke Jeffs

LONDON (Reuters) - Deutsche Boerse and NYSE Euronext have extended the deadline for completion of their planned merger to March 31 next year as they seek to convince European regulators to back the $9 billion deal.

The exchanges, which agreed the merger on February 14, told the Securities and Exchange Commission last week they were exercising their right to extend the initial termination deadline of December31 2011.

The extension came after months of frantic lobbying by the merger partners as they try to convince European anti-trust authorities in Brussels to approve the combination -- the last hurdle to the deal.

European authorities are fearful the merged entity would have a monopoly in European futures and options and have sought remedies from the exchanges, which between them have over 90 percent of European trading, to address this concern.

The exchanges offered concessions in November, including spinning-off parts of NYSE's futures trading business and offering open-access to D.Boerse's clearing unit to rival exchanges.

But these were rejected by European officials, prompting further concessions two weeks ago and an assurance last week that derivatives trading fees would be capped for three years after the deal.

But European regulators last week showed no signs of buying these arguments, fuelling speculation the exchanges would look to bypass the anti-trust team and focus their lobbying on competition commissioner Joaquin Almunia.

The exchanges are likely to make a case for why their deal to create a pan-European exchange operator -- and the world's largest -- would be good for the European Union at a time when the continent is in financial crisis.

Both sets of exchange shareholders and the U.S. anti-trust authority have approved the deal so the European Commission is the last major hurdle for what would be the largest exchange merger in history.

The Commission is scheduled to decide whether to approve the merger by February 9 but Almunia said last week a decision on the deal was possible by the end of January.

(Editing by Helen Massy-Beresford)

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