London Stock Exchange Group (LSEG) is to acquire a majority stake of up to 60 per cent of clearinghouse LCH.Clearnet in a deal worth EUR463 million.
Under the terms of the Transaction, London Stock Exchange (C) Limited (LSEC) will pay EUR20 per LCH.Clearnet Share acquired, comprising a cash consideration of EUR19 per LCH.Clearnet Share payable by LSEG under the Offer plus EUR1 per LCH.Clearnet Share from the Special Dividend payable by LCH.Clearnet (which may be reduced by the cost to LCH.Clearnet of any Relevant Claim(s)).
The total implied value of LCH.Clearnet under the terms of the Transaction is EUR813 million (GBP677 million), comprising a total implied Offer value of EUR772 million (£643 million) and assuming EUR41 million (GBP34 million) paid under the Special Dividend. The maximum consideration to be paid by LSEG at Completion, assuming LSEG acquires 60 per cent of LCH.Clearnet’s Issued Share Capital, will be EUR463 million (GBP386 million), which will be financed from existing cash resources and bank facilities.
Through this Transaction, LCH.Clearnet and LSEG will partner as a global leader in multi-asset, multi-venue clearing and risk management services, providing customers with an enhanced product and service offering.
Commenting on today’s announcement,
Chris Gibson-Smith, Chairman of LSEG says: “Strategically, structurally and financially this is a highly persuasive transaction. At a time when experience, stability and trust count for so much, we are delighted to be partnering with LCH.Clearnet as global leaders in market infrastructure. Together, we have secured the Enlarged Group’s long term role in the operation of international capital markets and we look forward to continuing to successfully deliver on our diversification strategy and to drive shareholder value.”
Jacques Aigrain, Chairman of LCH.Clearnet, says: “We are pleased to partner with LSEG which has a shared philosophy of horizontal architecture and close partnership with customers. We look forward to working together to build on our respective strengths as we seek to deliver one of the premier global multi-asset, multi-venue clearing and risk management businesses.”
Xavier Rolet (pictured), Chief Executive Officer of LSEG says: “The Transaction will be transformative, delivering a strong, customer-focused clearing partnership between LSEG, LCH.Clearnet and our customers, the broker-dealer community. We will seek to promote greater innovation, choice and competition in the listed derivatives market through this new-style open-access clearing model, building on the successes we have already had with our existing equity and fixed income trading partnerships, Turquoise and MTS.”
Ian Axe, Chief Executive Officer of LCH.Clearnet, adds: “Transforming LCH.Clearnet into a best in class international CCP will be accelerated by the partnership’s enhanced capabilities. We see significant revenue opportunities opening up as a result of both customer and regulatory demand for more efficient and more sophisticated tools to manage market risk.”