(News Bulletin 247) – The pan-European stock market operator sold its shares in the LCH SA clearing house to a company belonging to the London Stock Exchange.

The stock market operator Euronext announced on Monday the sale of its shares in the LCH SA clearing house to a company from the British stock exchange group London Stock Exchange (LSE), continuing its policy of developing its own activities.

The group announced “a definitive agreement for the sale of its shares, 11.1%, in LCH SA to LCH Groupe Holdings Limited (+LCH Group+), for an amount of 111 million euros”, leaving the capital of the clearing house, responsible for ensuring the security and smooth running of transactions on the markets.

A transaction effective in July

This sale “makes LCH Group the sole owner of LCH SA”, for its part indicated in another press release the LSE group, British competitor of Euronext, to which LCH Group belongs. “Once this status has been strengthened, LCH Groupe intends to further accelerate the introduction of new products and services to customers through LCH SA”, assured the British operator.

The transaction, financed with “existing cash”, he said, should be effective in early July.

Euronext, manager of the Paris, Amsterdam, Brussels, Lisbon, Dublin, Oslo and Milan stock exchanges, has been developing since April 2021, and the takeover of Borsa italiana, its clearing activities and thus ending its subcontracting contracts.

A “non-underlying” capital gain of around 40 million euros

This sale follows the announcement in mid-January of “the early termination of the agreement” between Euronext and LCH SA, concerning derivatives and commodity derivatives contracts, concluded for 10 years in 2017.

By making this purchase, LCH Group is applying an option contained in the 2017 terms of sale according to which it notably had the possibility of repurchasing the shares of Euronext in certain circumstances where the agreement on derivatives was terminated. The pan-European operator had exchanged its 2.3% stake in LCH Group against 11.1% in the Parisian subsidiary of the British.

In its press release on Monday, Euronext predicts that it “will realize a non-underlying capital gain of around 40 million euros”, excluding derivatives-related activities, in the third quarter of 2023.

During its quarterly results announced in May, Euronext had seen its net profit fall sharply after having deducted the 36 million euros paid to LCH SA in order to terminate the contract which bound them.

(With AFP)