Euronext, a pan-European stock exchange , announced its decision today (Monday) to sell its 11.1 percent stake in LCH SA, a major clearing house , to LCH Group Holdings Limited for €111 million.

Euronext Sells Its Minority Stakes in LCH SA

The two parties, Euronext and LCH Group, have already entered into a definitive agreement for the sale, which is expected to be finalised in early July 2023. The deal came as a buyback program, and an independent expert determined the price.

Because of the sale, Euronext will be subject to a non-underlying capital gain of around €40 million which is tax-free. The company also highlighted that it accounted for a carrying amount of €70.6 million for its holdings in LCH SA by the end of 2022.

A Major European Player

Euronext is headquartered in the Netherlands and is a major capital markets player in Europe. It is known for operating stock markets across Europe through its subsidiaries. The exchange group further acquired Borsa Italiana from the London Stock Exchange Group to expand its footprint in the European markets.

Euronext acquired LCH SA in December 2017 with a share swap deal: Euronext swapped its 2.3 percent stake in LCH Group for an 11.1 percent stake in LCH SA.

The latest divestment in LCH SA was reached with LCH Group’s notification to exercise its buyback option for the 11.1 percent stake in LCH SA, which is held by Euronext. The deal proceeded early termination of the existing derivatives clearing agreement between Euronext and LCH SA that was announced in mid-January.

LCH SA is a clearing house based and regulated in France. The clearing services housed within LCH SA include CDSClear, RepoClear SA, EquityClear SA, and CommodityClear SA.

“Euronext and LCH SA are committed to working together to ensure an orderly migration of clearing flows from LCH SA to Euronext Clearing,” the announcement stated.