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Euronext to acquire Borsa Italiana in €4.3bn deal

Euronext is looking to buy Borsa Italiana for €4.3bn, in a move that it said would turn it into a leading player in European capital markets infrastructure.

Stéphane Boujnah, chief executive and chairman of the managing board of Euronext, commented: “The proposed combination will create the backbone of the Capital Markets Union in Europe.”

It has entered into a binding agreement with the London Stock Exchange Group (LSEG), which said it will sell its entire shareholding if it gets approval from the European Commission to buy financial data provider Refinitiv.

The Commission said in June that it is concerned that LSEG’s purchase of Refinitiv may reduce competition in the trading and clearing of various financial instruments and in financial data products.

The deal also depends on shareholder and regulatory approval.

Benefits of the deal

According to Euronext, the transaction will:

  • total €4.4trn in aggregate market capitalisation of listed companies;
  • span secondary markets for both debt and equity financing in Europe, diversify Euronext business mix in new asset classes and strengthen its post-trade activities;
  • deepen the liquidity pool and bring significant benefits for European capital markets and the Italian financial ecosystem; and
  • strengthen the stock exchange’s European cash equities, while adding significant capabilities in fixed income trading, such as European government bonds due to the addition of the bond trading platform MTS.

The Borsa Italiana and Euronext will facilitate access to equity financing for companies, with a specific focus on small and medium-sized enterprises, family-owned and tech companies and develop the finance platform Elite for ambitious and fast growing companies in a pan-European framework.

Between January and August 2020, average daily volumes of about €2.5bn in cash equity and more than €200bn in fixed income were traded on the Borsa Italiana Group’s markets, Euronext said.

Boujnah added: “The Borsa Italiana Group will preserve its identity and integrity within Euronext’s federal model, while benefiting from enhanced governance, best-in-class offering and technology, to better serve the Italian capital markets.”

The deal is expected to close in the first half of 2021.

Elena Johansson

Senior Reporter

Part of the Bonhill Group.