LSE Borsa deal 'will be approved'

LSE will expand its trading capabilities beyond share listings

London Stock Exchange (LSE) directors have said they are confident that the firm's investors will approve its takeover of Milan-based Borsa Italiana.

The pan-European merger, worth 1.6bn euros (£1.1bn; $2bn), was agreed on Friday, but remains subject to approval by LSE's shareholders.

LSE chief executive Clare Furse said she believed the deal would "have more than sufficient support to go through".

If approved, the LSE could change its name, dropping London from its title.

The company said the decision to create a new title for the enlarged group was to "reflect its international profile".

It said discussions were taking place with the Financial Services Authority (FSA) and Italian regulator Consob regarding a possible name change.

But it added that the LSE and Borsa would remain separate legal and regulatory entities and retain their existing brands in their home markets.

Beyond equities

The merger will allow LSE to expand and diversify its business, which is predominantly focused on listing shares of UK and international companies.

"This merger is all about accelerating our growth through the provision of more and better products and services to our increasingly international customer base," said LSE chief executive Clare Furse, who will become chief executive of the enlarged group.

Borsa Italiana trades derivatives, such as futures contracts, and has a large presence in exchange traded funds - collective investments that track an index but can be bought and sold like a share.

Italian benefits

The merger was welcomed by the Bank of Italy and by Italian business and political leaders who described it as very beneficial for Italy.

The governor of the Bank of Italy, Mario Draghi, said it would bring the Italian stock market out of its present isolation.

The Borsa Italiana was privatised by Mr Draghi 10 years ago.

Borsa Italiana shareholders will be offered just under five shares of the LSE for each ordinary share in Borsa Italiana.

The new board will have seven British members and five Italians and will operate under UK corporate governance.

Chief executive of Borsa Italiana Massimo Capuano will become deputy chief executive of the combined group.