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CCTV Script 27/07/16

– This is the script of CNBC's news report for China's CCTV on July 27, Wednesday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Deutsche Börse said on Tuesday that it had gathered enough support from shareholders for its merger with the London Stock Exchange Group to proceed.

The approval of the transaction came just over a month after Britons voted to leave the European Union, which cast doubt about the viability of the deal.

The outcome of the June 23 vote has raised questions among investors about whether the London Stock Exchange-Deutsche Börse merger can be completed under its current terms, and in particular whether the combined entity's holding company should be based in Britain, as planned.

Two weeks ago, the exchanges agreed to reduce the threshold for investors in Deutsche Börse to agree to exchange their stock in the German exchange for shares in a new holding company for the combined entity.

In a news release, the German exchange operator said that at least 60 percent of its outstanding shares had been pledged to support the deal, exceeding the acceptance threshold needed for the transaction to proceed.

This month, shareholders in the London exchange overwhelmingly approved the all-stock deal, which the stock exchange operators hope will create a European champion in the industry.

Ahead of Tuesday's deadline, a number of German investors called for the companies to re-evaluate their plans and to move the holding company's base elsewhere in the European Union.

The merger agreement originally called for at least 75 percent of Deutsche Börse's outstanding shares to be tendered in the offer, but the companies agreed to lower the threshold to 60 percent on July 11 in hopes of making it easier for index funds to participate.

Index funds represent up to 15 percent of Deutsche Börse's shares and, because of a technical issue, could tender their shares only after the minimum acceptance threshold was reached.

The companies' battle to join forces has already faced several challenges.German authorities, for example, have recoiled at the prospect of their exchange's holding company having its headquarters in London. The City will be outside the European Union once the U.K. leaves the bloc.

Leaders in France and Germany are at the same time jockeying to take euro-denominated clearing away from Britain. LSE's LCH unit is the world's largest clearer of interest-rate swaps, and clearing is one of the key rationales for the tie-up.

The deal still needs to be approved by both the European Commission and national regulators. In written submissions to the commission, Belgium and Portugal have said they oppose the tie-up because they believe it would reduce competition.

CNBC's Qian Chen, reporting from Singapore.

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