8
London Stock Exchange Group Plc said on Wednesday it would buy a 4.92 percent stake in Euroclear, Europe's biggest settlement house for securities, for 278.5 million euros ($318.44 million).
The British exchange operator said the deal would give it a stake in all parts of a transaction - trading, clearing and settlement.
Analysts have said https://www.reuters.com/article/euroclear-ma-lse/lse-would-gain-from-takeover-of-hidden-jewel-euroclear-ubs-analysts-idUSL8N1LH2L8 a takeover of Brussels-based Euroclear by LSE would make financial sense and give European Union rivals such as Deutsche Boerse a run for their money.
LSE said the deal would add to its earnings and would be funded with existing cash and debt facilities.
"LSEG's minority investment is expected to strengthen LSEG and Euroclear's existing operational and commercial relationship and provide further opportunities," LSE said in a statement.
Euroclear also settles stock and bond trades for LSE's smaller rival Euronext, the pan-European bourse with operations in Paris, Amsterdam, Brussels and Lisbon.
The Intercontinental Exchange has also built a stake in Euroclear, and French bank Societe Generale sold a 2.05 percent stake in Euroclear to Belgian state-owned financial firm SFPI in November.
LSE's deal comes as the exchange operator has been tightening its grip on derivatives clearing in a sign of growing confidence that the threat of losing business to after Brexit was receding.
LSE's LCH is one of the world's top clearing houses for derivatives, but its dominance in euro denominated transactions has led to calls for that activity to be relocated to the single currency area after Britain exits the European Union.
($1 = 0.8746 euros)
