BY Fraser Tennant
In a transaction which creates a leading player in European capital markets infrastructure, London Stock Exchange Group (LSEG) is to sell Borsa Italiana, Italy's only stock market exchange, to pan-European stock exchange Euronext for $5bn in cash.
The combination significantly enhances the scale of Euronext, diversifies its business mix into new asset classes and strengthens its post-trade activities, as well as delivering on its ambition to build the leading pan-European market infrastructure.
“The acquisition of Borsa Italiana marks a significant achievement in our ‘Let’s Grow Together 2022’ strategic plan and a turning point in our history,” said Stéphane Boujnah, chief executive and chairman of the managing board of Euronext “Thanks to this transaction, we will significantly diversify our revenue mix and geographical footprint by welcoming the market infrastructure of Italy, a G7 country and the third largest economy in Europe.”
Euronext is financing the transaction via bridge loan financing and long-term financing to be implemented through a mix of existing available cash, new debt and new equity.
“We have enjoyed a long and successful relationship with LSEG, which has invested in and developed our business over the last 12 years,” said Raffaele Jerusalmi, chief executive of Borsa Italiana. “We look forward to embarking on the next phase of our history, working in partnership with Euronext to further develop our business and to contribute to the development of European capital markets.”
The sale of Borsa Italiana to Euronext is supported by the board of LSEG who intend to recommend that shareholders vote in favour of the resolution to approve the transaction at a extraordinary general meeting on 20 November 2020.
“We believe the sale of Borsa Italiana will contribute significantly to addressing the EU’s competition concerns,” said David Schwimmer, chief executive of LSEG. “Borsa Italiana has played an important part in LSEG’s history. We are confident that it will continue to develop successfully and contribute to the Italian economy and to European capital markets under Euronext’s ownership.”
The completion of the transaction is expected in the first half of 2021 subject to Euronext’s and LSEG’s shareholder approvals, and regulatory approvals in Italy, the UK, the US, Belgium and France.
Mr Boujnah concluded: “The combination of Euronext and the Borsa Italiana delivers the ambition of building the leading pan-European market infrastructure, connecting local economies to global capital markets.”
News: LSE agrees to sell Borsa Italiana to Euronext for $5 billion