The London Stock Exchange has entered exclusive talks with Paris-based Euronext about selling Borsa Italiana, Italy’s only stock exchange, it announced today.
It comes as the London Stock Exchange (LSE) tries to win European regulatory approval for its $27bn (£21bn) purchase of data provider Refinitiv.
The LSE announced in July that it may sell MTS or “potentially the Borsa Italiana group as a whole”. It purchased the exchange for €1.6bn – or around £1.1bn – in 2007.
The July statement was prompted by an “in-depth” EU antitrust investigation of the Refinitiv deal.
Brussels is concerned that LSE’s control of both a key financial data provider and one of the world’s biggest exchanges could give it unfair advantages.
The LSE today said it had “received and reviewed a number of competitive proposals from several parties for each of MTS and the Borsa Italiana group as a whole” since it announced a potential sale. MTS is Borsa Italiana’s sovereign bond-trading platform.
It added: “LSEG confirms it has now entered into exclusive discussions with Euronext NV in relation to the sale of the Borsa Italiana group.”
The continent-wide exchange group beat off competition from Switzerland’s Six exchange and Deutsche Boerse.
Italy helps Euronext’s Borsa Italiana bid
Euronext runs exchanges in Paris, Amsterdam, Dublin, Brussels, Lisbon and Oslo. Its bid is a joint venture with Italian state-owned investor Cassa Depositi e Prestiti (CDP) and Italian bank Intesa Sanpaolo.
The Italian government has long argued that MTS is a “strategic asset” because it runs sovereign bond trading.
The inclusion of CDP was seen as helping Euronext win approval from both the LSE and Rome. Both CDP and Intesa would become shareholders in Euronext under the terms of the deal.
Euronext said today that “Italy, through Borsa Italiana, would become the largest revenue contributor to the enlarged Euronext group”. However, it said: “There can be no certainty that this will lead to a transaction.”