"Based on the Commission's current position, LSEG believes the Commission is unlikely to provide clearance for the merger". Now it looks as if it might fall foul of both.
In a statement, LSE said the Commission raised concerns earlier this month about the impact of the merger on access to bond and repo trading feeds, with MTS now providing a major platform for trading European government bonds. But the signs are not encouraging.
The Commission's concerns "were pretty clearly flagged", said one third-party adviser, pointing to the Commission's public statement when it opened its probe, as well as objections issued in December.
A deal to sell LCH SA to European exchange rival Euronext was announced in January this year.
The stock exchange, headed up by Xavier Rolet, says it can not satisfy Brussels' request to divest MTS by the Commission's deadline on Monday. In 2007 the LSE merged with Borsa Italiana, the operator of the Milan stock exchange, and in the process gained a controlling stake in MTS.
"Officially, the talks go on with the Commission, but what the LSE have said is a reasonable assumption".
The deal had already aroused controversy amid calls from German politicians that the headquarters of the combined group should be shifted from London to Frankfurt, while German prosecutors had launched a probe into Deutsche Borse boss Carsten Kengeter over possible insider trading, which he denies.
MTS is so important to its business, particularly in Italy, that the LSE has refused to put forward proposals to sell it off, despite the request from Brussels.
Deutsche Boerse didn't immediately respond to a request for comment.
Following discussions with Italian authorities, the LSE said it believes the disposal of MTS is "highly unlikely".
LSE said that such a sale would need regulatory approval from several governments in Europe, and it would be detrimental to its wider Italian business.
"LSE resolved tonight to not commit to the required divestment of LSEG's majority stake in MTS", Deutsche Börse said in further information that the decision of the commission is still unclear and answers will be visible by the end of March.