The shake-up of Europe’s trading houses was in full flow today as the London Stock Exchange snapped up a stake in Belgium’s Euroclear and US giant Nasdaq entered the bidding for the Norwegian stock exchange.
The LSE will pay £243.35 million for a 4.92% stake in Euroclear and take a seat on the board of the clearing house as competition for exchanges heats up across Europe.
The LSE wants to try to tighten its grip on derivatives clearing in Europe amid fears it could lose business after Brexit.
There has been talk that LSE’s LCH, one of the world’s top settlement houses for derivatives, could lose its dominance in euro-denominated clearing transactions as European politicians want that activity to be relocated to the single-currency area after the UK exits the European Union.
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. LSE said the Euroclear deal would add to its earnings and be funded with existing cash and debt facilities.
Analysts hinted a bidding war could break out for Euroclear as US-headquartered Intercontinental Exchange has also built a 10% stake in the clearing house over the past 18 months.
Euroclear was founded in 1968 as part of JPMorgan to settle trades on the then developing eurobond market.
Meanwhile Nasdaq said it had tabled an offer for Oslo Børs worth $770 million (£586 million). It comes after Euronext, the Franco-Dutch exchange operator, made a $711 million takeover attempt last month. The LSE is also rumoured to have considered a bid.
The Oslo Børs board of directors has recommended the Nasdaq offer. Nasdaq already owns the main exchanges in Denmark, Sweden and Finland.