Euronext has made a €10 million investment in ICE Clear Netherlands following the breakdown of negotiations to acquire LCH. Clearnet SA from the London Stock Exchange (LSE).
The European exchange operator has signed an agreement - which includes the investment - with ICE Clear Netherlands for the provision of clearing services for its derivatives products.
Euronext explained considering the “refusal of LSE Group and LCH Group to engage in discussions about completing the agreed sale of Clearnet,” it must seek other clearing solutions for its clients.
The LSE withdrew its offer to sell LCH Clearnet SA to Euronext following the European Commission’s decision to prohibit the merger with Deutsche Boerse.
The deal with ICE Clear Netherlands covers the clearing of financial derivatives and commodity derivatives over a 10-year period.
Stéphane Boujnah, CEO at Euronext, explained despite the prohibition of the merger between the LSE and Deutsche Boerse, “Euronext has reaffirmed to both LSE and LCH Group its willingness to proceed with the acquisition of Clearnet for €510m, and Euronext continues to remain a willing buyer of Clearnet.
“But in the absence of obtaining an agreement to complete this acquisition, Euronext is fully committed to securing the best long-term solution for its post-trade activities, in the interests of clients and shareholders.”
Euronext said the agreement forms part of Euronext’s ‘Agility for Growth’ strategy, which saw the firm acquire 20% stake in EuroCCP.
ICE Clear Netherlands will immediately engage with Euronext on client consultations and the new clearing house will be migrated during the second half of this year.