LSEG unveils intention to buy US-based Acadia o grow its multi-asset Post Trade offering
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The London Stock Exchange Group (LSEG) announced yesterday, December 19th, that it has decided to purchase a US-headquartered risk and collateral management provider, Acadia. The LSEG has had a stake in Acadia for over four years now, and now, it has revealed its intention to acquire it.
@LSEGplc to acquire Acadia. The acquisition furthers LSEG’s strategy to enhance and grow its multi-asset Post Trade offering for the uncleared derivatives space. Read the press release: https://t.co/sLvYdxMdAX pic.twitter.com/bbN2avvlbH
— LSEG (London Stock Exchange Group) (@LSEGplc) December 19, 2022
According to the announcement, the acquisition will “further LSEG’s strategy to enhance and grow its multi-asset Post Trade offering for the uncleared derivatives space.”
Benefits of the acquisition
Acadia emerged in 2009 as a provider of risk management, collateral services, and margining to financial institutions around the world, with a focus on uncleared derivatives markets. Its products span all OTC derivatives and offer connectivity to more than 2,000 market participants. In total, it is estimated that the firm enables over $1 trillion in collateral exchanges every day.
As mentioned, LSEG has had a minority stake in the US-based firm since 2018, but due to Acadia’s deep domain expertise when it comes to margining, risk management, and collateral, LSEG decided that Acadia is highly complementary to its own Post Trade capabilities.
With the acquisition, LSEG will be able to improve its provision of systemically important and resilient financial market infrastructure. After all, both Acadia and LSEG share an important commitment to an open model. This means that they aim to provide their users with a choice on how to process trades.
Acadia’s CEO to join LSEG’s Post Trade team
With the acquisition, Acadia will now become a part of LSEG’s Post Trade division. Meanwhile, its CEO, Chris Walsh, will report to LSEG’s Group Head of Post Trade, Daniel Maguire. Commenting on the new development, Maguire said that Acadia’s inclusion into LSEG’s strategy would bring new ways for customers to optimize their financial resources. He added that he is looking forward to working with the team at Acadia, and to continued innovation that will further drive efficiencies across the derivatives landscape.
Acadia’s CEO, Chris Walsh, also commented on the move, stating that it represents a major milestone for Acadia. The LSEG team has a strong track record when it comes to providing services in the derivatives marketplace. By combining the two entities, LSEG will now have access to Acadia’s expertise in risk mitigation, collateral, and margining, which will lead to new and exciting opportunities for the users. They will be able to optimize their post trade operations more efficiently, according to Walsh.
For the moment, the transaction is awaiting regulatory approval, but the exact terms of the move have not been revealed.
It is also worth noting that the deal was announced only days after Microsoft bought a 4% stake in LSEG, and announced a 10-year partnership deal with the UK’s leading stock exchange operator.
LSEG has also made several other acquisitions in 2022, indicating its strong standing in the global financial market. One example is MayStreet, which it acquired in May 2022. Before that, LSEG also acquired Global Data Consortium in April, and it bought TORA in February.
