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The proposed merger of Deutsche Boerse (ETR:DB1) and the London Stock Exchange (LON:LSE) is facing increasing opposition from politicians in Germany following the UK’s vote for Brexit, The Sunday Times reported.

Michael Fuchs and Ulrich Caspar, members of the ruling CDU party, are among politicians who believe it would be impossible for the merged group to have its headquarters outside of Europe and should be governed from Frankfurt, the report said, noting the current plan is for London to be the base.

Caspar questioned whether possible changes to trading rules and regulations might result in incompatibilities between the UK and the EU, leaving some European financial products in breach of British law, the item reported.

According to people with close links to the deal, the LSE’s chief executive, Xavier Rolet, would not contemplate a move of HQ to Frankfurt, the item reported. A banking source close to the London bourse stated it would not be possible to arrange a relocation of the HQ without nixing the merger deal already agreed and drawing up a new transaction, the report said.

According to people close to the German exchange, the Anglo-German referendum committee set up by the two groups to consider the implications of Brexit will this week look at whether Deutsche Boerse might be able to transact a full takeover of the LSE rather than the merger of equals proposed.

A person close to Intercontinental Exchange (NYSE:ICE), which last month withdrew from bidding for the LSE, hinted the US exchange might return with a new bid, stating that the prospect should not be categorically ruled out, the report said.

Both the LSE and Deutsche Boerse announced their commitment to the GBP 20bn merger after the results of the UK’s EU referendum were made public this week, the item noted. The deal is to be put to the companies’ shareholders next month.

In the wake of the Brexit vote shares in the LSE dropped 10.5% and in Deutsche Boerse fell 9.26%, the report said.