London Stock Exchange acquires stake in Euroclear

UK exchange group acquires 4.92% stake in Euroclear as two look to work together on commercial collaboration and product development.

The London Stock Exchange (LSE) has acquired a 4.92% stake in Euroclear for €278.5 million, following a similar move by one of its trading venue rivals last year.

Euroclear is privately owned by over a hundred user-shareholders and has seen a number of transactions in its shares over the past 12 months.

In February, Intercontinental Exchange upped its stake in the international central securities depository to 10%, while Societe Generale sold a 2.05% stake to state-owned Belgian investment firm Societe Federale de Participations et d’Investissement (SFPI).

The LSE said the deal will strengthen its existing operational and commercial relationship and provide further opportunities for the companies to deliver benefits to their customers through commercial collaboration and product development.

“We are delighted to become a shareholder of Euroclear, with which we have a long-standing operational and commercial relationship,” said David Schwimmer, CEO of LSEG. “Both LSEG and Euroclear share the same open access philosophy and a customer partnership approach which is central to our businesses. We look forward to working with Euroclear to drive continued innovation and efficiencies for the benefit of our customers and the wider market.”

LSE said the transaction will be funded from existing cash and debt facilities and following the completion a representative of LSEG will join the Board of Euroclear Holding SA/NV.

While Brexit was not mentioned in the statement, the move could allow LSE to maintain a foothold in mainland Europe’s post-trade market following the UK’s departure from the European Union.