LONDON (Reuters) - The Intercontinental Exchange (ICE.N) has paid 275 million euros ($323.5 million) for a “strategic” stake in Euroclear, Europe’s biggest settlement house for securities, stealing a march on rival London Stock Exchange (LSE.L).
The move strengthens New York Stock Exchange owner ICE’s footprint in Europe. UBS analysts had said in August the LSE would gain from a takeover of Euroclear, which they described as a “hidden jewel”.
Brussels-based Euroclear, which settles shares traded on the LSE, bought the stake from Britain’s Royal Bank of Scotland (RBS.L). A settlement house is where trillions of euros worth of stock and bond trades are completed, with legal ownership exchanged for cash.
“This transaction demonstrates our continued focus on expanding our investments in mission critical clearing and risk management assets,” ICE Chairman and Chief Executive Jeff Sprecher said in a statement.
ICE anticipates getting a seat on the Euroclear board.
“We look forward to supporting Euroclear’s role as an independent provider of vitally important financial market infrastructure services,” Sprecher said.
Basic settlement services in the euro zone are being taken over by the European Central Bank’s Target 2 Securities platform.
This leaves Euroclear and rival Deutsche Boerse’s (DB1Gn.DE) Clearstream battling it out to dominate “value added” services such as shuttling collateral to customers for backing trades, and risk management.
LSE Chief Executive Xavier Rolet said in June he was looking at whether the group should buy or build a cross-border settlement house to have a global collateral framework for customers.
The stake means ICE has a presence in all three legs of securities transactions in Europe - the other two being trading and clearing.
Euroclear is owned by more than 150 of its users, mainly banks and also settles transactions for Euronext (ENX.PA), the pan-European stock exchange which ICE offloaded after it acquired the New York Stock Exchange.
($1 = 0.8501 euros)
Reporting by Huw Jones, editing by David Evans