Euronext to Sell All 11.1% Stake in a Major Clearing House LCH SA
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Earlier today, June 26th, a pan-European stock exchange Euronext announced that it will sell its stake in LCH SA. The exchange holds an 11.1% stake in the major clearing house, and it decided to sell it all to LCH Group Holdings Limited. The exchange’s stake was bought for 111 million EUR.
Euronext is selling its LCH SA stock for €111 million
The two parties have already managed to reach an agreement for the sale. According to the deal, the sale should be finalized in the following weeks, in early July of this year. The deal is actually a part of the LCH Group’s buyback program, and the price of €111 million for an 11.1% stake was determined by independent experts.
Due to the sale, Euronext will be subject to a non-underlying capital gain estimated to be €40 million. This amount is tax-free. Furthermore, the firm noted that it accounted for a carrying amount of €70.6 million for its holdings in the company by the end of last year, 2022.
Euronext is a major European player, based in the Netherlands. It is mostly known for operating stock markets in various parts of Europe. The company has several subsidiaries operating in different nations on behalf of Euronext.
Another major decision made by the exchange recently was to acquire Borsa Italiana. Borsa was held by the London Stock Exchange Group, and its acquisition will allow the platform to expand even further throughout European markets.
How did Euronext come to own 11.1% of LCH SA?
Regarding the company’s stake in LCH SA, it was acquired back in late 2017. At the time, the company made a share swap deal, where it swapped its 2.3% stake in LCH Group for an 11.1% stake in LCH SA.
However, after five and a half years, LCH Group decided to exercise its buyback option, and reclaim the stocks it gave to Euronext. The deal actually precedes early termination of the derivatives clearing agreement between LCH SA and Euronext. It was announced earlier this year, in January.
As for LCH SA itself, it is a clearing house that is headquartered in France. It is a regulated clearing house that contains a number of services. These include EquityClear SA, CDSClear, CommodityClear SA, and RepoClear SA.
The announcement said that Euronext and LCH SA are committed to working together to ensure an “orderly migration of clearing flows from LCH SA to Euronext Clearing.”
