Euronext buys ISE for €137m
Euronext has acquired the Irish Stock Exchange (ISE) for €137m in an attempt to boost its exchange-traded fund (ETFs) business and take advantage of opportunities from the UK leaving the European Union.
Lee Hodgkinson, head of markets and global sales at Euronext, said in a statement, “We are bullish on ETFs and the drive to passive. The ISE has a strong franchise with issuers such as Pimco and WisdomTree and Euronext is strong on ETF trading so the combination of talent will be fantastic.”
The acquisition gives Euronext the home venue for Irish equities, but also a market for debt securities and the largest European centre for ETFs. Ireland will be Euronext’s sixth “core European country” alongside the main exchanges in France and the Benelux nations.
Deirdre Somers, chief executive of the ISE, described the exchange as a “200 year-old start up” although the firm was established in its current form when the ISE demerged from the London Stock Exchange in 1995.
“We are the number one fund listing venue globally with 5,242 investment funds securities and 227 ETFs,” Somers added. “Asset managers from over 50 countries use Ireland to administer 13,000 funds with more €4 trillion of assets.”
Brexit was also a factor, as Somers notes, Ireland will be the only common law jurisdiction that is English speaking in the EU after Brexit and so is uniquely placed to deliver Brexit solutions.
“Brexit has implications for London depending upon on the deal that is reached and we have optionality for the business with a commitment to the EU,” added Somers. “We could think about dual listings or other offerings to solve problems.”
After completion, ISE plans to migrate its technology to Optiq, Euronext’s new proprietary trading platform. Closing is expected in the first quarter of 2018 subject to regulatory approvals from the Euronext College of Regulators and the Central Bank of Ireland.
ISE is currently owned by five Irish financial institutions, J&E Davy, Goodbody Stockbrokers, Investec Capital & Investments, Cantor Fitzgerald and Campbell O’Connor that have all committed to sell their shares.
Euronext said in July that it had as much as €2bn to invest as it sought to diversify its revenue sources. The world’s biggest exchanges are still looking to consolidate, although Deutsche Boerse’s acquisition of London Stock Exchange Group failed earlier this year.