London Stock Exchange seals a deal to sell off Borsa Italiana to France's Euronext for £3.9bn

Oct 9, 2020

London Stock Exchange seals a deal to sell off Borsa Italiana to France’s Euronext for £3.9bn

  • Sale should allow LSE to gain approval for its £20bn merger with Refinitiv  
  • LSE had entered in exclusive talks with Euronext last month
  • LSE said it now expects to complete the merger with Refinitiv towards the end of this year or in early 2021 – before the completion of the sale of Borsa Italiana 

The London Stock Exchange has struck a €4.3billion cash deal (£3.9billion) to sell its Borsa Italiana to France’s Euronext.

After weighing up several offers for the Italian exchange, LSE entered in exclusive talks with Euronext last month. 

LSE is selling the business in order to gain approval from European regulators for its blockbuster £20billion merger with data firm Refinitiv.  

Sale agreed: The LSE is hoping that the sale of its Borsa Italiana (pictured) will help clear the way for its massive merger with Refinitiv

Sale agreed: The LSE is hoping that the sale of its Borsa Italiana (pictured) will help clear the way for its massive merger with Refinitiv

‘We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns,’ LSE chief executive David Schwimmer said in a statement. 

LSE announced the deal to buy data provider Refinitiv – best known among City investors and brokers for its informative trading screens – last year. 

It is hoping the merger will help it expand into a rapidly growing niche, and make it the world’s most powerful trading technology business. 

But the European Commission told LSE it would only approve the Refinitiv deal if all or part of Borsa Italiana is sold.

LSE said it now expects to complete the merger with Refinitiv towards the end of this year or in early 2021 – before the completion of the sale of Borsa Italiana, which it expects to complete in the first half of next year.

Euronext is a major European stock exchange group with markets in London, Paris, Dublin, Amsterdam, Brussels, Lisbon and Oslo.   

It managed to fight off European rivals including Germany’s Deutsche Boerse and Switzerland’s Six exchange, who had all tabled offers.

Euronext teamed up with Italy’s sovereign wealth fund CDP Equity and banking group Intesa Sanpaolo on its bid to try make it more attractive to the Borsa Italiana – policymakers in Rome are keen to keep a tight grip on the exchange’s bond-trading platform, which is used for trading Italy’s vast pile of sovereign debt. 

LSE expects to complete the merger with Refinitiv towards the end of this year or in early 2021

LSE expects to complete the merger with Refinitiv towards the end of this year or in early 2021

LSE expects to complete the merger with Refinitiv towards the end of this year or in early 2021

Italy’s Treasury has the power to block any takeover of the Borsa through its Golden Power Law, which allows the Government to veto foreign investment in industries which are deemed to be strategic for the country.    

Raffaele Jerusalmi, chief executive of Borsa Italiana, said: ‘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.’

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