Euronext is to sell its 11.1% stake in LCH SA, the French subsidiary of LCH Group, for €111 million, to majority stake holder LCH Group.
Once the deal is complete, LCH Group confirmed to BEST EXECUTION that it will assume full ownership of LCH SA.
The deal, expected to close in July 2023 and funded from cash reserves, fulfils the option of LCH Group to buy back Euronext’s 11.1% stake following the early termination of the derivatives clearing agreement between Euronext and LCH SA announced on 16 January 2023.
London Stock Exchange Group (LSEG), majority shareholder of LCH Group, said the deal underscores the importance of LCH SA to LCH Group and LSEG.
Following consolidation of its ownership, LCH Group intends to roll out new products and services to customers through LCH SA, such as the clearing of Bitcoin index futures and options contracts traded on GFO-X. This will be made available through a new segregated clearing service, LCH DigitalAssetClear, and expected to go live in Q4 2023.
As a result of the deal, in Q3 2023 Euronext will incur a non-underlying capital gain of around €40 million, which will be exempt from tax.
As of 31 December 2022, Euronext accounted for a carrying amount of €70.6 million for its 11.1% stake in LCH SA.
Both Euronext and LCH SA pledged to work together to ensure an orderly migration of clearing flows from LCH SA to Euronext Clearing.
©Markets Media Europe 2023
