London Stock Exchange admits £20bn German merger could be damaged by Brexit

In a detailed note designed to add meat to the bones of the pair’s mooted tie-up, the two bourses pointed directly to the upcoming June referendum, and said that the enlarged business could be hurt there to be a vote to leave the EU, reports The Telegraph.

“The parties are proceeding on the basis that existing regulatory and political structures remain in place,” said the two exchanges.

However the two boards have formed a Referendum Committee to look at the ramifications were a so-called ‘Brexit’ to occur.

The pair said that were the UK to leave the EU, the volume and nature of the business may be affected.

However they emphasised that the outcome of the June 23 vote would not be a condition of the merger.

In addition to the impact of the EU, the pair have also been discussing who would run the merged entity such a deal take place.

Central to this is the departure of Xavier Rolet, chief executive of LSE Group, who would stand down.

The business would be run by Deutsche Boerse chief Carsten Kengeter, with LSE chairman Donald Brydon becoming chairman of the combined business.

Mr Brydon praised Mr Rolet as the “architect” of LSE Group’s “considerable value creation” during his seven year tenure.

LSE chief financial officer David Warren would continue in that role for the group, with Deutsche Boerse chairman Joachim Faber becoming senior independent director and deputy chairman.

The pair have still yet to publicise what the combined group would be called, but have said that it be a British plc, with headquarters located in London and Frankfurt.

The deal will be an all-share merger, with LSE investors owning 45.6pc, and shareholders in the German exchange holding the remainder.