LSE considers sale of Borsa Italiana to appease regulators
The London Stock Exchange (LSE) has hinted at the potential sale of its Borsa Italiana business to support its proposed $27 billion acquisition of Refinitiv.
LSE and Refinitiv have been in talks over a $27bn merger since 2019
“Exploratory discussions” are underway which may involve either the Italian exchange’s bond trading platform or its entire company being sold.
The move comes as European antitrust regulators take an interest in the Refinitiv acquisition.
The European Commission (EC) has concerns that the deal could reduce competition in trading and clearing.
LSE is planning to fund the acquisition with new shares used as currency. Refinitiv’s existing investors will become LSE shareholders and own about 37% of the combined company.
Thomson Reuters owns a 45% stake in Refinitiv and has confirmed it will own a 15% stake in LSE if the deal goes through.
The EC has several concerns about the results of a merger. A combination would bring together major trading venues where electronic trading of bonds of the European Economic Area (EEA), UK, and Swiss governments takes place.
LSE bought Borsa Italiana for €1.6 billion in 2007. It is Italy’s only stock exchange and holds a market capitalisation of around $3 trillion
David Schwimmer, LSE chief executive, says there could be “potential benefits” to the selling off of the Italian group.
Schwimmer adds that his firm is in continuing and “constructive” talks with the EC.
