The London Stock Exchange is selling Italy’s only stock market platform to Euronext for $5 billion

REUTERS/Toby Melville

  • The London Stock Exchange agreed to sell Italy’s only stock market platform to Paris-headquartered Euronext for about $5 billion.
  • LSE said it opted to divest the Milan stock exchange to fulfill a condition for its acquisition of  data-provider Refinitiv, which is currently under review by the European Union’s executive arm.
  • The deal is politically sensitive, as the Italian government was debating whether to take back full control of Borsa Italiana earlier this year.
  • Euronext has partnered with Italy’s largest bank and state agency CDP to secure the Italian government’s backing.
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The London Stock Exchange agreed on Friday to sell Milan’s Borsa Italiana to pan-European stock operator Euronext for 4.3 billion euros ($5 billion).  

The LSE said it began discussions with Paris-based Euronext last month and a share purchase agreement was signed on October 9.

The sale depends on LSE’s prospective $27 billion acquisition of data provider Refinitiv, the terms of which are under investigation by the European Commission. 

LSE said it opted to divest the Italian stock exchange to persuade the EU regulator to approve its takeover of Refinitiv.

“We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns,” LSE CEO David Schwimmer said in a statement, adding that the exchange is making “good progress” on the Refinitiv deal.

The Refinitiv transaction is expected to be completed by early next year, while the Borsa Italiana deal is set to clear in the first half of 2021. 

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Euronext, valued at about 7 billion euros ($8 billion), will fund the transaction through a combination of a debt and equity hike and existing cash.

“Euronext will significantly diversify its revenue mix and its geographical footprint by welcoming the market infrastructure of Italy, a G7 country and the third largest economy in Europe,” Euronext CEO Stéphane Boujnah said in a statement. 

LSE intends to use the proceeds from the deal to help offload its debt tied to the Refinitiv deal.

Italy’s coalition government has been seeking to take back full control of Borsa Italiana, which owns a 62% stake in Italy’s government-bond platform MTS, as part of an attempt to limit foreign investment in sectors seen as key national infrastructure. 

Euronext has partnered with Italy’s largest bank, Intesa Sanpaolo, and state agency CDP to secure the Italian government’s backing.

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