Pan-European bourse operator Euronext has unveiled proposals to buy the London Stock Exchange, saying a merger would deliver significant benefits.
Euronext, which runs stock markets in France, the Netherlands, Belgium and Portugal, said today a merger with the LSE would lead to annual pretax cost and revenue gains of around €203 million, with total restructuring and revenue investment costs of around €184 million.
Euronext estimated it could achieve €152 million in annual cost gains in the second year after the merger's completion, and another €51 million of additional annual revenue in the third year.
"Euronext and LSE are natural partners, sharing a pro-competitive, horizontal, technology-led business model," Euronext said in a statement that came after weeks of low-key discussions between Euronext and LSE management.
Euronext also said it would adopt a unitary, single tier board and seek a dual primary listing in London and Paris.
It stopped short of saying what it would be prepared to pay for the LSE, which runs Europe's biggest stock market.
Euronext reiterated that there could be no assurance that a formal offer would be made.
The cross-border exchange also promised immediate benefits to LSE users, with a 10 percent overall reduction in current tariffs for UK cash trading, and a commitment to more reductions.
The London bourse has already rejected a 530 pence-per-share offer from Germany's Deutsche Boerse.
The German exchange said late in January that a merger with the LSE would add at least €100 million a year to pre tax profit from 2008, and estimated restructuring costs at less than €100 million.