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FT: Deutsche Börse keen to cut costs

Deutsche Börse AG has put a hiring freeze in place, as it reviews its spending to stay within the 2017 budget following a slow start to the year, the Financial Times reported March 31.

The company had made the decisions at February-end, "people familiar with the situation" told the FT. Its proposed merger with London Stock Exchange Group Plc was blocked by the European Commission on March 29 over serious antitrust concerns related to fixed-income instruments and single stock equity derivatives' trading.

The plans include carrying out only critical spending, like that required by regulators, according to "people briefed on the matter." The group reported in February preliminary consolidated net income of €170.0 million in the fourth quarter of 2016, up from €88.7 million in the year-ago period.

Deutsche Börse's employees fear that the failed merger with LSE, which could eventually cost the German group up to €100 million, according to insiders, could lead to layoffs.

The works council sent a letter March 30 demanding that Deutsche Börse comes up with a better plan that looks beyond cost savings.

Deutsche Börse CEO Carsten Kengeter told analysts during a meeting in London on March 30 that the group is prepared to cut costs to hit its target of at least 10% earnings growth, according to the report.

Kengeter also reportedly said there would not be any special dividends or buybacks, unlike LSE, which launched a £200 million share buyback program, compensating shareholders who were promised a special dividend following the merger.