The London Stock Exchange today announced a deal to take over its loss-making rival Turquoise, creating a new pan-European trading platform.
The LSE said it would take a 60% stake in the smaller pan-European trading platform, currently owned by investment banks.
The LSE said it would incur exceptional costs of up to £20m sterling as a result of the deal.
The LSE, led by French chief executive Xavier Rolet, said it planned to merge Turquoise with its 'dark pool' Baikal business, named after a Siberian lake. Dark pools are sites on exchanges where large trades can be executed for clients anonymously so as not to disrupt the market.
Mr Rolet, chairman-designate of the new venture, said the new venture would offer 'an attractive range of innovative and competitively priced products and services across Europe.'
The LSE said that 'significant cost savings are expected to be achieved by merging Baikal and Turquoise.'
Turquoise was set up in 2006 by a consortium of nine investment banks, including Goldman Sachs and Morgan Stanley, in response to high trading fees being levied by the LSE. Launched officially in August last year, it has yet to make a profit.
The LSE has faced competition from new share trading platforms since EU regulators opened the doors to them in 2007.
