London Stock Exchange sells Italy’s Borsa to Euronext in £3.9bn deal

London Stock Exchange offloads Italy’s Borsa to Euronext in £3.9bn deal

Euronext has won the race to buy the Borsa Italiana from the London Stock Exchange.

The Paris firm, which runs stock exchanges in France, the Netherlands, Ireland and Portugal, will pay £3.9billion for the LSE’s Italian arm.

The sale of the Borsa Italiana, dubbed ‘Project Botticelli’, will come as a relief for the LSE.

Euronext, which runs stock exchanges in France, the Netherlands, Ireland and Portugal, will pay £3.9bn for the LSE’s Italian arm the Borsa Italiana

It needed to offload some operations to gain approval for a separate, blockbuster £20billion merger with data firm Refinitiv.

European competition regulators were worried that following the Refinitiv deal, the LSE would have too large a hold on certain parts of the City’s financial infrastructure.

The LSE said that the sale of Borsa, and approvals from regulators for the deal, would be critical in winning control for the Refinitiv transaction from the European Commission.

David Schwimmer, chief executive of the LSE, 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 acquisition of Refinitiv, best known among City traders for its informative terminal screens, is being hailed by Schwimmer as a ‘transformational’ moment for the LSE.

He hopes the merger will turn it into a trading technology powerhouse, which can provide data and analytics to investors, as well as the financial plumbing which keeps the City ticking.

But EU regulators threw a spanner in the works after referring the deal for an in-depth probe, over fears that a tie-up of the LSE and Refinitiv could hinder competition in the provision of critical data used across global markets.

Rob Murphy, of research consultancy Edison Group, said: ‘The transaction will pave the way for EU regulatory approval of LSE’s quest to acquire Refinitiv and build a powerhouse in data, indices and analytics, whilst giving Euronext control over major bond trading platform MTS and making them the largest venue in the EU for listings and share trading.’

He added: ‘It’s an opportunistic and transformative deal.’

Euronext was up against other bidders including Swiss stock exchange Six and Germany’s Deutsche Boerse.

Its original approach was rumoured to be one of the lower bids, but it teamed up with Italy’s sovereign wealth fund CDP Equity and banking group Intesa Sanpaolo.

This may have made the Euronext offer more attractive – policy makers in Rome are keen to keep a tight grip on the Borsa’s bond-trading platform, which is used for trading Italy’s vast sovereign debt.

LSE will use the money from the sale to pay down the debt it is taking on to buy Refinitiv.

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