Sale of the Italian market infrastructure is expected to help LSEG complete its $27bn acquisition of Refinitiv

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Euronext signs deal to acquire Borsa Italiana Group. (Credit: José Luiz Bernardes Ribeiro / CC BY-SA 4.0/

The London Stock Exchange Group (LSEG) has agreed to sell London Stock Exchange Group Holdings Italia (LSEG Italia), the parent firm of Borsa Italiana Group, to Euronext for about €4.32bn.

Apart from the consideration, LSEG will be paid an additional amount for reflecting cash generation to completion.

In mid-September 2020, Euronext and CDP Equity entered into exclusive talks with LSEG for the potential deal.

LSEG is taking up the sale of Borsa Italiana Group in order to win approval from the European Commission (EC) for its previously announced $27bn acquisition of Refinitiv.

LSEG CEO David Schwimmer said: “We continue to make good progress on the highly attractive Refinitiv transaction and we are pleased to have reached this important milestone.

“We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns. The Borsa Italiana group 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.”

Borsa Italiana Group is an integrated Italian market infrastructure, which has been part of LSEG since 2007.

It comprises the Italian stock exchange company Borsa Italiana, bond trading marketplace MTS, and other business lines.

Why Euronext is acquiring Borsa Italiana Group

For Euronext, the acquisition of the Italian group will help it in creating one of the top market infrastructures in the European Union.

Furthermore, the deal is said to considerably increase the scale of Euronext. It will diversify the business mix of the Netherland-based stock exchange into new asset classes, while bolstering its post-trade activities.

The enlarged group following the merger will be among the top listing venues in Europe with over 1,800 companies listed and €4.4 trillion aggregate market capitalisation of listed firms.

It is also expected to become one of the major venues for secondary markets in Europe and a top venue in equity financing.

Euronext CEO and managing board chairman Stéphane Boujnah said: “The combination of Euronext and the Borsa Italiana Group, with the strategic support of long-term investors such as CDP, delivers the ambition of building the leading pan-European market infrastructure, connecting local economies to global capital markets.

“This transaction will enhance the position of the Borsa Italiana Group within continental European capital markets. The Proposed Combination will create the backbone of the Capital Markets Union in Europe.”

The deal will be conditional upon, among other things, the sale of the Italian stock exchange firm or a material part being a condition set by the EC for clearing the Refinitiv transaction.

The completion of the sale of Borsa Italiana is anticipated to occur in the first half of 2021, subject to receipt of various approvals and meeting of certain conditions.