Deutsche Boerse-LSE cost savings to exceed 300 million euros - sources

By Andreas Kröner, Arno Schuetze and Anjuli Davies

FRANKFURT (Reuters) - Deutsche Boerse (DB1Gn.DE) and the London Stock Exchange (LSE.L) are targeting cost savings of more than 300 million euros (£233 million), once a merger of the two exchanges is completed, three people familiar with the matter said on Tuesday.

Deutsche Boerse and LSE are expected to officially announce a merger agreement next week, two of the sources said.

"Cost synergies will clearly exceed the 300 million euros targeted in the Deutsche Boerse - NYSE merger in 2011," one of the sources said, adding that Deutsche Boerse's and LSE's businesses are much more complementary.

The cost savings - mainly in back office and information technology functions - will fully pan out after several years, the sources said.

"In the beginning, the companies will continue to run all platforms and only over time shift business to the better platform or the better technology," one of the sources said.

Deutsche Boerse and LSE declined to comment.

The potential cost reductions are important for shareholders to determine whether to accept a merger offer or to potentially consider an alternative tie-up of LSE with U.S.-based ICE (ICE.N).

LSE said last week a merger with Deutsche Boerse would be "compelling" as potential rival bidders line-up for the British company.

As part of the merger announcement, Deutsche Boerse and LSE are expected to comment on three different kinds of savings: cost, revenue and synergies for banks and investors.

(Additional reporting by Vidya L Nathan; Editing by Jonathan Gould and Susan Thomas)