The London Stock Exchange and Germany's Deutsche Börse announced their plans to merge on Tuesday, following jump in the LSE group's share price.

The LSE Group, which owns the Milan stock exchange in addition to the one in London, said it was part of an effort to form a Europe-based "global markets infrastructure group," according to a statement released by the company.

This new entity "would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis," the statement said.

Companies' share prices surge

Following the statement, LSE's share price spiked by almost 20 percent. Earlier, rumors of the merger had already led to increased share prices for LSE.

Meanwhile, Deutsche Börse gained around 8 percent in Frankfurt following the announcement of the deal.

Shareholders in the Frankfurt-based Deutsche Börse, which has been run by Carsten Kengeter since the summer of 2015, will take a 54 percent stake in the new company.

blc/rc (AFP, dpa, Reuters)