Frankfurt stock exchange operator Deutsche Boerse revealed on Friday that in the proposed tie-up with the London Stock Exchange, the merged group would be based in the British capital, but a potential ‘Brexit’ could jeopardise the plans.

Deutsche Boerse’s chief executive Carsten Kangeter would assume the role of CEO of the combined company if the tie-up goes ahead, the German company said in a statement outlining the rationale and key points behind the proposed merger.

But any vote by Britain to leave the European Union could put the entire project at risk, Deutsche Boerse warned.

Further to their announcement on February 23, the London Stock Exchange and Deutsche Boerse had agreed the following key terms "in relation to the potential merger to form a combined group," the statement said.

"The potential merger would be structured as an all-share merger of equals under a new UK holding company," the statement said.

The LSE and Deutsche Boerse "would become intermediate subsidiaries of the combined group. The existing regulatory framework … would remain unchanged, subject to customary and final regulatory approvals."

The combined group would also be listed on both the London and Frankfurt stock exchanges.

"It is envisaged that the combined group shares would be eligible for inclusion" in the blue-chip stock indices, EuroStoxx, DAX and FTSE.

The combined group would have headquarters in London and Frankfurt, "with an efficient distribution of corporate functions in both locations," the statement continued.

The board of the merged unit would have "equal representation" from both sides.

At completion, LSE chairman Donald Brydon would become chairman of the combined group.

Kengeter, CEO of Deutsche Boerse, would assume the role of CEO and executive director of the combined group while LSE’s finance chief David Warren would be chief financial officer.

"On completion of the transaction, Xavier Rolet will step down from his role as CEO of LSE," the statement added.

In addition, a joint committee had been set up to advise on the implications of the outcome of Britain’s upcoming referendum on EU membership, Deutsche Boerse said.

But it was "recognised that a decision by the UK electorate to leave the European Union (a ‘Leave Decision’) would put the project at risk," the statement said.