The London Stock Exchange is in talks over a “merger of equals” with Germany’s Deutsche Boerse.
The pair are holding “detailed discussions” about a tie-up that would create a “leading European-based global markets infrastructure group”, according to the LSE.
Shares in FTSE 100-listed LSE jumped 17 per cent after it confirmed plans for the potential merger of the two exchange operators, although the stock had already surged ahead of the news amid speculation over a deal.
The combined group would be worth nearly £20 billion.
But the talks mark the second attempt at a merger between the two after a proposed deal collapsed in 2000.
The LSE said they are working on an all-share merger, which would see LSE shareholders hold 45.6 per cent of the combined group and Deutsche Boerse the remaining 54.4 per cent.
All key businesses of LSE and Deutsche Boerse would continue under their current brand names and it would have a single board made up of an equal number of directors from the two firms.
The LSE said discussions remain ongoing over the other terms and conditions of the deal.
“The potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group,” the LSE said.
It added that “complementary growth strategies, products, services and geographic footprint” would allow the enlarged group to offer a “full service offering to customers on a global basis”.