London Stock Exchange sells Italian unit to Euronext at all-cash $5 billion deal

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London Stock Exchange sells Italian unit to Euronext at all-cash $5 billion deal

London Stock Exchange Group Plc., the Britain-based stock exchange and financial information company, said on Friday that it had been an advanced stage talk to divest its Italian unit Borsa Italiana with rival Euronext for at least $5.11 billion in a bid to cement its $27 billion acquisition of market data analysis firm Refinitiv.

In factuality, the group owning London stock exchange, Borsa Italian, Russell Indexes, FTSE International and a majority stake in LCH and MTS, said at its Friday’s announcement that the London Stock Exchange Group Plc.’s latest move to sell off its Italian unit to a rival had been largely aimed at receiving the EU regulators’ approval for its $27 billion acquisition of Refinitiv, since the Group was expecting the EU regulators would ask to divest some of its assets in order to allow the takeover bid for Refinitiv, owned by Reuters.

Concomitantly, the London Stock Exchange Group Plc. had agreed to purchase the Reuters-owned financial data provider Refinitiv at a $27 billion buyout deal back in the August of 2019.

Meanwhile, referring to EU Commission’s anti-trust concerns, LSE Group Chief Executive David Schwimmer said in a statement late on Friday, “We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU’s competition concerns.

Euronext may struggle to finance Borsa Italian deal, say analysts

Although Euronext, the owner of stock exchanges in France, Netherlands and Ireland among others had expressed a through and through optimism over the Borsa Italiana deal citing that the buyout would substantially diversify the group’s revenue mix alongside its footprint in the market landscape in Italy, the all-cash buyout deal would likely to meet with an upscaled drag for the beleaguered Paris bourse operator having had a market valuation of €7 billion, suggested analysts.

Nonetheless, Euronext affirmed on Friday that it was planning to raise a €1.8 billion in debts and at least €2.4 billion in equities in order to finance the deal.