DTCC, Europe’s LCH.Clearnet Plan Merger

The Depository Trust and Clearing Corporation (DTCC), the largest financial clearinghouse in the U.S., is in talks to merge with its European rival LCH.Clearnet in a deal worth approximately $950 million.

The merger would create “the world’s leading clearinghouse,” which will “enable both the European and U.S. financial communities to benefit from the services of a user-owned, user-governed, at-cost model across a broader range of markets and asset classes,” said LCH.Clearnet Chairman A. Chris Tupker.

In addition to a common infrastructure between the continents, customers will also benefit from cost reductions and higher risk management standards, the release said.

"By combining DTCC and LCH.Clearnet’s natural synergies and complementary skills, we expect our customers will not only see significant cost savings in the clearance and settlement of the many securities and instruments we already service, but also greater access to a more diverse range of product offerings and support of emerging asset classes,” said Donald F. Donahue, chairman and CEO of DTCC.

The two companies plan to sign a definitive accord by March 15, 2009.