LSE Starts Exclusive Talks with Euronext for Selling Borsa Italiana

Euronext submitted a joined bid with CDP Equity and Intesa Sanpaolo for the Italian exchange.

The sale of Borsa Italiana is slowly taking shape as the London Stock Exchange (LSE) has entered into exclusive talks with Euronext to finalize the deal.

Confirmed by both parties, this is a major step in the negotiation process. However, it does not indicate a confirmation of the sale.

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“There can be no certainty that a transaction will result from these discussions and any potential sale will be dependent upon the outcome of the European Commission’s review of the Refinitiv transaction and that transaction closing in accordance with its terms,” LSE noted in a statement.

Indeed, the dilution of Borsa Italiana from the LSE’s portfolio is to pave the way for regulatory approvals for the landmark $27 billion deal to acquire market data provider, Refinitiv.

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LSE confirmed that it has received several bids for Brosa Italiana, but Euronext seems to have beat the other parties, including Germany’s Deutsche Börse and Switzerland’s SIX Group.

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It is to be noted that the deal includes MTS, an electronic fixed income trading market, along with the Milan-based exchange. According to external analysts, the combined value of the deal could be anywhere between €3.5 billion and €4 billion. Though, LSE bought the Italian business for €1.6 billion in 2007.

Euronext itself is one of the major European financial market operators and runs six exchanges across the continent. 

To acquire Borsa Italiana, it submitted a joined bid with CDP Equity, an entity owned by an Italian investment bank, Cassa Depositi e Prestiti, and the Italian banking group, Intesa Sanpaolo.

“Italy, through Borsa Italiana, would become the largest revenue contributor to the enlarged Euronext group,” Euronext stated in a press release.

“Borsa Italiana would maintain its current functions, structure, and relationships within the Italian ecosystem and preserve its Italian identity and strengths,” Euronext elaborates on its plans with the Italian exchange. “The Italian CEO of Borsa Italiana would join the Managing Board of Euronext. The CEO of MTS would join the extended Managing Board, alongside the other key leaders of large business units and key central functions of Euronext, with group-wide responsibilities for fixed income trading.”

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