Euronext has received the blessing of the European Commission for its €4.3 billion acquisition of Borsa Italiana from the London Stock Exchange, bringing the exchange group one step closer to finalising the deal.
Following an in-depth investigation into the mega-merger, European authorities greenlight the buyout transaction, which was dependent on the EU’s approval of LSEG’s $27 billion takeover of Refinitiv.
The EU antitrust watchdog said its investigation had raised a number of concerns about the deal, but these issues could be addressed through a number of remedies.
“This approval further improves the certainty of execution of the Transaction, by satisfying an additional major condition for the completion of the Transaction,” Euronext said.
The development marks another step forward for the pan-European exchange in its bid to acquire the Italian key bourse and create a new financial markets heavyweight.
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The EU’s clearance follows the approval from LSEG’s shareholders for Euronext’s acquisition aspirations on 3 November. The Euronext general meeting, which took place on 20 November, also saw the proposed takeover receive support from 99.9% of all votes cast.
The exchange operator said the transaction with the Milan-based stock exchange diversifies its business mix into new asset classes, and strengthens its post-trade activities. In addition, it will give Euronext a clearinghouse for the first time, as well as a securities depository and bond platform.
Euronext said in a statement that following the approval, the deal remains subject to a small number of merger control and financial regulatory authority approvals but that it expects the deal to be completed within the first half of this year.
Brussels regulator had raised concerns that the takeover of financial data provider, Refinitiv would dampen competition in trading and clearing as the tie-up would give the combined entity too much control over market data.
In response to the commission’s concerns, which oversees competition policy in the 27-nation bloc, LSEG agreed to sell off its Borsa Italiana business to rival exchange Euronext and two Italian lenders.