LONDON (AFP) – The London Stock Exchange confirmed Saturday it was buying the Borsa Italiana for 1.6 billion euros (2.15 billion dollars) in shares, according to a joint statement.
Under terms of the deal, Borsa Italiana shareholders will be offered 4.90 LSE group plc ordinary shares for each existing Borsa Italiana ordinary share, the two bourses said.
Based on share prices and exchange rates of June 19, the offer values Borsa Italiana at 1.634 billion euros and represents a value of 100.7 euros per Borsa Italiana share.
The board of the combined company would have 12 members, seven from the LSE and five from Milan-based Borsa Italiana.
The LSE board believes it will have “more than sufficient support from its shareholders” for the merger.
The combined worth of companies quoted on the two bourses will be around 3.8 trillion euros, according to figures at the end of May from the Federation of European Securities Exchanges.
That would make the merged group the first in Europe, ahead of Euronext.
The deal allows the LSE to strengthen its position amid takeovers of European stock markets by US rivals.
In May, the US electronic stock market Nasdaq made a friendly offer worth 3.7 billion dollars (2.76 billion euros) for Nordic exchange operator OMX aimed at creating the world’s second-biggest exchange.
That deal came a little more than a month after the completion of the New York Stock Exchange’s takeover of Euronext, the pan-European operator of the Paris, Amsterdam, Brussels and Lisbon markets.
Nasdaq OMX will become the second-largest equities exchange by capitalisation after the NYSE Euronext.
The merger couples “the strengths of Borsa Italiana in Italian cash equities, derivatives, securitised derivatives, fixed income products and efficient post-trade services with those of the London Stock Exchange in UK and international equities,” the LSE-Borsa Italiana statement said.
“It will capture the attractive macro-economic and market growth dynamics of Italian equities and bring together the best of the Italian and UK marketplaces,” it added.
London Stock Exchange Group plc will be the holding company of the combined group and, in addition to its listing in London, intends to seek a listing on Borsa Italiana.
The combined group would be worth 5.777 billion euros.