LSE to promote Borsa Italiana inventory trade to Euronext for $5 billion
LONDON — The London Stock Exchange on Friday agreed to sell Milan’s Borsa Italiana stock exchange to Euronext for 4.3 billion euros ($5 billion).
LSE confirmed it had entered exclusive discussions with pan-European bourse operator Euronext about the sale of the Borsa Italiana group last month.
It comes after LSE reached definitive terms to purchase data provider Refinitiv for $27 billion. The European Commission, the EU’s executive arm, has opened an in-depth investigation to consider the terms of the proposed transaction.
The sale of Borsa Italiana is dependent on, among other things, the Refinitiv transaction going through.
“We continue to make good progress on the highly attractive Refinitiv transaction and we are pleased to have reached this important milestone,” David Schwimmer, CEO of LSE Group, said in a statement on Friday.
“We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns,” he added.
LSE said it expects to complete the Refinitiv deal by the end of 2020, or early 2021, with the Borsa Italiana transaction set to go through in the first six months of next year.
Shares of LSE were up around 0.2% shortly after the opening bell, with Euronext up more than 0.7% on the news.
“We look forward to embarking on the next phase of our history, working in partnership with Euronext, CDP Equity and Intesa Sanpaolo to further develop our business and to contribute to the development of European capital markets,” Raffaele Jerusalmi, CEO of Borsa Italiana, said on Friday.
Pedestrian passes Italy’s Stock Exchange, the Borsa Italiana, which is part of the London Stock Exchange Group Plc, in Milan Italy, on Thursday, Oct. 8, 2020.
Camilla Cerea | Bloomberg via Getty Images
‘Borsa Italiana will not be a periphery asset’
The sale of Borsa Italiana to Euronext is seen as politically sensitive in Italy due to Borsa’s ownership of MTS, the bond platform which handles the electronic trading of Italian government bonds and other types of fixed income securities.
Euronext has partnered with Italy’s biggest bank Intesa Sanpaolo and state agency CDP in an attempt to secure the backing of Rome’s government.
Stephane Boujnah, CEO and chairman of the managing board of Euronext, described the deal as a “significant achievement” in the firm’s strategic plan, “and a turning point in our Group’s history.”
Speaking to Class CNBC later on Friday afternoon, Boujnah which quick to play up the importance of Borsa Italiana once the transaction is finalized.
“Italy will be the latest contributor to the Euronext group, When you are the largest contributor to any company you are very important. And there is no success of Euronext going forward, without the success of Borsa Italiana,” he said. “Borsa Italiana will not be a periphery asset in a large group.”