The London Stock Exchange Group and Deutsche Börse are discussing a deal that would see the creation of a holding company for the combined group based in London and led by the German exchange's current chief executive.

The two companies said on Tuesday that they were in advanced talks about an “all-share merger” but declined to disclose several key details such as future management and the domicile of the combined group.

Under plans being discussed, Carsten Kengeter, the Deutsche Börse CEO, would become chief executive of the new company, according to people close to the situation. Donald Brydon, chairman of the LSE, would take up the same role in the combined group.

Xavier Rolet, chief executive of the LSE who engineered the deal, will step back from the business after seven years at the helm.

If successful, the deal would see London emerge as the domicile for the holding company, bolstering the city as a financial centre at a time when the UK’s relationship with Europe is set to be decided with an impending referendum.

However, the location of the domicile for the holding company could be affected by the outcome of the referendum on whether the UK should leave the EU.

People close to the matter warned that discussions are not finalised and there was no certainty a deal would go ahead.

The LSE declined to comment.

- Copyright The Financial Times Limited 2016