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Shares in Deutsche Börse and the London Stock Exchange dropped in early trading after the exchange groups’ plans to merge hit a major snag.

In a statement late on Sunday, the UK exchange said it would not be able to sell a bond trading platform by a sudden deadline imposed by officials to ensure that the main remedy the exchanges have offered Brussels will work in practice, throwing the €29bn merger into doubt.

The dispute puts the merger, which has been more than a year in the making, at risk of collapse. The deal to link London and Frankfurt, Europe’s two largest financial hubs, has been criticised by politicians in both countries, particularly after the UK voted to leave the EU in June last year.

Shares in Deutsche Börse fell by 4.8 per cent on the news, while LSE shares fell by 3 per cent.

Copyright The Financial Times Limited 2017. All rights reserved.

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