Der Spiegel news weekly reported that Kengeter told Lars-Hendrik Roeller - an economic advisor to Chancellor Angela Merkel - in November 2015 that he was "basically in agreement" with the LSE over a planned merger.
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Frankfurt prosecutors announced last week that they had opened a probe against the Deutsche Börse CEO on suspicion of insider trading after he bought around 4.5 million euros ($4.8 million) worth of his own firm's shares in December 2015.
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Those shares increased sharply in value after the announcement of the LSE merger plans in February 2016.
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Investigators say they suspect merger talks between executives at the two stock market operators in fact began in July or August 2015 and ran until early December.
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Deutsche Börse says the shares were part of the normal executive pay programme - and that in any case, the two stock market operators did not open tie-up talks until January 2016.
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Asked about the report in Der Spiegel, which did not cite any sources, a Deutsche Börse spokesman told AFP the operator was cooperating with the insider trading investigation.
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A chancellery spokeswoman told AFP it does not comment on meetings held by Merkel's economic advisors.
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The LSE-Deutsche Börse merger would create a financial markets behemoth competing with the likes of the Chicago Mercantile Exchange and ICE in the United States, as well as the Hong Kong stock exchange in Asia.
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A tie-up would ring up one of the globe's biggest groups for stock listings and market data, creating competition fears among EU rivals.
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LSE formally offered this week to sell clearing house LCH Clearnet SA to European rival Euronext if the European Commission approves the deal at the end of a competition probe.
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