The European Commission has opened an in-depth antitrust investigation into the London Stock Exchange's planned $27 billion takeover of financial data vendor Refinitiv.
In a statement, the Commission says it is "concerned that the proposed acquisition may reduce competition in trading and clearing of various financial instruments and in financial data products".
Specifically, the EC says it is concerned about the transaction's effect on the electronic trading of European government bonds, where the LSE's MTS venue and Refinitiv's Tradeweb are market leaders.
In addition, a combined entity would have significant market power in the trading and clearing of interest-rate derivatives.
Meanwhile, "the Commission has preliminary concerns that following the proposed transaction, competitors in consolidated real-time datafeeds and desktop services could be shut out from accessing LSEG's input data," says the statement.
The Commission has until 27 October to take a decision on the planned deal.
The LSE says it "continues to engage constructively" with the EC and remains committed to closing the transaction this year.