Financial Institutions M&A: Sector trends - June 2019: Stock exchanges/Clearing houses

White & Case LLP

White & Case LLP Financial institutions M&A sector trends: stock exchanges/clearing houses — H1 2019 and outlook for H2 2019


  • Upward


  • Inorganic expansion by larger exchanges:
    • Horizontally (e.g., Euronext's acquisition of control of Oslo Børs and ATHEX's equity investment in Kuwait Stock Exchange)
    • Vertically (e.g., LSE's acquisition of additional 4.9% of Euroclear and securing of board representation)
  • Deployment of investment capital resources towards fintech (in particular, data analytics)


  • Building multijurisdictional scale:
    • Within Europe (e.g., Euronext operates exchanges in Paris, Lisbon, Amsterdam, Brussels and Oslo)
    • Europe outbound (e.g., Athens Stock Exchange's consortium acquisition of 44% of Kuwait Stock Exchange)
    • US inbound (e.g., Nasdaq operates exchanges in Copenhagen, Stockholm, Helsinki, Tallinn, Riga and Vilnius)
  • Concerns around non-viability of the independent stock exchange operation model in the long term
  • Bolt-on acquisitions:
    • Investment in trade efficiency technology
    • Diversification into information and post-trade services
  • Nationalistic attitudes and perceived market foreclosure apprehensions continuing to mar transactional deals


  • Larger exchanges seeking scale. However, mergers between core European exchanges are unlikely, and antitrust concerns will need careful navigation (e.g., divestment commitments)
  • Investors in larger exchange operators seeking to cash out
  • Possibility of smaller deals in the foreign exchange and commodities space


M&A to achieve scale is still high on agendas of the boards of core European exchanges. However, the aborted LSE/ Deutsche Börse merger highlights the political, antitrust and regulatory challenges for an EU merger-between-equals.

Other financial services—Publicly reported deals & situations

Inorganic growth


  • Deutsche Börse: Acquisition of Axioma (April 2019)
  • London Stock Exchange: Acquisition of 4.9% of Euroclear (January 2019)

Horizontal cooperation:

  • MarketAxess: ETF JV with Virtu (April 2019)

Vertical cooperation:

  • SIX: Global sanctions data JV with Eagle Investment Systems (April 2019)

International expansion


  • Euronext: Acquisition of majority control of Oslo Børs (May 2019)
  • Nasdaq: Acquisition of 37% of Oslo Børs (April 2019)
  • Athens Stock Exchange: Consortium acquisition of 44% of Kuwait Stock Exchange (February 2019)


  • Singapore Exchange: Acquisition of 20% of BidFX (March 2019)

Digital world demands– outsourcings and bolt-ons

  • London Stock Exchange: Acquisition of Beyond Ratings (June 2019)
  • Liquidnet: Acquisition of RSRCHXchange (May 2019)
  • Deutsche Börse: Multi-year cloud services contract with Microsoft Azure (May 2019)
  • Nasdaq Technology: Acquisition of Cinnober Financial Technology (January 2019)
  • IHS Markit: Minority equity investment in Digital world Cobalt (January 2019)

Regulatory intervention

  • European Central Bank: Strong criticism of new proposed ESMA powers for boosting supervision of clearing houses (March 2019)
  • European Securities and Markets Authority: Proposed new powers to monitor clearing houses' risk management and to determine whether non-EU institutions should move to the EU (March 2019)

Brexit contingency planning

  • Aquis Exchange: French Prudential Supervision and Resolution Authority approval for new Paris hub (January 2019)

[View source.]

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