Euronext weighs bid for LSE Paris business LCH SA

Billy Bambrough
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The LSE is working to satisfy the regulator ahead of its tie-up with Deutsche Borse
The LSE is working to satisfy the regulator ahead of its tie-up with Deutsche Borse (Source: Getty)

Euronext – the owner of the main Paris, Dutch, Portuguese and Belgian stock exchanges – is mulling a bid for the London Stock Exchange’s (LSE) Paris-based clearing house.

It’s thought the LSE’s Paris business, called LCH SA, could be worth up to €500m (£386m).

The London Stock Exchange wants to offload the business to ease its £21bn tie-up with Germany’s Deutsche Borse over regulatory hurdles, meaning the business could fetch less than its book value, it was reported by the Sunday Times.

Read more: Stock exchanges' battle to win EU Commission approval for merger commences

Last week the European Commission opened an in-depth investigation in to whether the planned merger between Deutsche Borse and the LSE could reduce competition in financial markets.

The proposed merger would combine the exchanges of Germany, the UK and Italy, as well as several of the largest European clearing houses, and create by far the largest European exchange operator.

A deadline of 13 February has been set by the Commission and the exchanges are still planning to complete the merger in the first half of next year. Gaining approval from the EU Commission is seen as one of the major hurdles for the deal but it’s understood the timeline factored in a long competition review.

Last month the boss Euronext claimed the merger would create a “virtual monopoly”. Chief executive Stephane Boujnah said the fusion would create a company 10 times larger than his in second place.

Read more: Rival exchange eyes from LSE merger "opportunities" as EU opposition grows

Meanwhile, the governments of France, Netherlands, Belgium and Portugal have all voiced opposition to the merger.

“The point-of-views of Euronext are just one part of the equation, but you’ve seen that the government of France, the government of Portugal, the government of Belgium and, to the best of my understanding, even very recently the government of Netherlands… have expressed their views,” said Boujnah in an interview with City A.M. earlier this year.

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