London Stock Exchange (LSE), the largest and the primary stock exchange in the United Kingdom, has agreed to sell Borsa Italiana stock exchange to French rival Euronext in a deal worth 4.3 billion euros ($5 billion).
Moreover, the London Stock Exchange expects an additional amount reflecting cash generation to completion in the near future. The Italian Bourse was acquired by London Stock Exchange back in 2007 at the height of global market depression for a whopping £1.5 billion. The sale a decade after will have made the firm more than triple in profit.
Notably, the talks between the London stock exchange and Euronext, for the former to sell Borsa Italiana began on September 18. Furthermore, the firm is set to purchase data provider Refinitiv for $27 billion.
The Refinitiv deal is among the largest determiners of the former deal’s success. Through a statement issued on Friday, David Schwimmer, CEO of LSE Group stated that the firm is making significant progress on the Refinitiv deal and is expected to be completed soon.
Borsa Italiana Sale by LSE to Euronext Bigger Picture
LSE is seeking to set clear standards ahead of the December review by the EU. “We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns,” Schwimmer indicated.
Raffaele Jerusalmi, CEO of Borsa Italiana said that the company is closely working with CDP Equity, Euronext, and Intesa Sanpaolo to further develop the stock market and meet the set regulations by the EU regulators. It is perceived that the Borsa Italiana sale was largely affected by Italian politics.
Stephane Boujnah, CEO and chairman of the managing board of Euronext, has described the deal as a “significant achievement” in the firm’s strategic plan, “and a turning point in our Group’s history.” During Friday’s New York Trading session, shares of London Stock Exchange Group PLC were up approximately 0.23% to trade around 8864.00.
As of Friday at the time of writing, LSE had a market capitalization of around £30.95 billion. Notably, its shares were up 21.42% in the past 12 months through September. In addition, they were up approximately 14.37% year to date through Thursday. As for the past three months, LSE stock had added approximately 6.13%. However, the shares dropped by approximately 1.84% in the last one month, and are now down 3.63% down in the past five days through yesterday’s trading session.
After 13 credible analysts critically analyzed LSE shares, they gave them an average of ‘Over’ rating.
This is interpreted as a buy although not convincingly strong.