Euronext to fund growth with €150m war chest

Acquisitions will form key part of exchange operator’s growth plans for next three years.

Euronext has put aside €150 million to fund its growth, which is likely to include bolt on acquisitions, it outlined today.

Releasing its new strategic plan today, the pan-European exchange operator said it will strengthen its core business but also look to “capture strategic opportunities”. As such, it has allocated between €100-150 million over the next three years to fund development costs and acquisitions.

Key priorities for its development including becoming the main exchange for European Tech SMEs, become a one-stop exchange-traded fund platform, launch Euronext branded indices and deliver clearing choice.

Euronext has already taken steps to deliver on broadening its clearing offering, having announced late on Thursday that it is in exclusive talks to buy a 20% stake in EuroCCP for €14 million.

Euronext hopes its new initiatives will bring in approximately €70 million of extra revenue by 2019, alongside a projected core business revenue growth of 2%.

The exchange operator’s decision to take a stake in EuroCCP and to expand via further acquisitions could be a response to the changing competitive environment in Europe. With its two main competitors, London Stock Exchange and Deutsche Boerse, currently in talks to merge, it has been speculated that trading and clearing in Europe could become less competitive as a result.