Euronext has announced the acquisition of the Irish Stock Exchange (ISE) for €137 million. Euronext is planning to combine ISE’s ETF issuer and listing expertise with its own pan-EU trading platform to deliver a pan-European ETF trading hub.
Ireland will become Euronext’s sixth core market.
As part of the integration, Euronext will position ISE as a centre for excellence for the group in the listing of debt, funds, and ETFs. The deal will see Ireland become Euronext’s sixth core country alongside France, the Netherlands, Belgium, Portugal, and the UK.
Stephane Boujnah, CEO and chairman of Euronext, commented: “The Irish Stock Exchange joining Euronext represents a major milestone in the expansion of Euronext’s federal model since its IPO. ISE brings to Euronext leading global positions in debt, funds, and ETF listings markets. As part of Euronext, ISE’s growth initiatives will be reinforced with Euronext’s full support.”
The ISE is host to 51 listed companies worth around €122 billion in total market capitalisation. It also provides access to 227 ETFs and over 30,000 debt securities from 90 countries. ISE generated revenues of €29 million in 2016 and so far in 2017, revenues are up 13% compared to last year.
Deidre Somers, CEO of ISE, commented: “This is a landmark day in the 224-year history of ISE and a great day for our customers and our people. This transaction recognises the significant value and leading market position that has been built by the ISE. More importantly, we believe that Euronext is the perfect partner to enable us to achieve our growth ambitions”
Euronext expects the acquisition to deliver pre-tax cost synergies of €6m per year and will also be hoping to maximise a potential growth in listings on the ISE on the back of any Brexit-related fallout. In addition, Euronext appears keen to integrate governance between the two entities, with Somers set to become Euronext’s head of debt, funds, and ETF listing and a member of Euronext’s managing board.
Boujnah continued: “We are delighted to welcome Deirdre Somers and her team to Euronext. In addition to strengthening revenue profile and cost synergies, ISE is ideally positioned to benefit from market opportunities in a post-Brexit environment. Within this environment, our unique federal model clearly demonstrates its added value through a single cross-country liquidity pool, a single state-of-the-art proprietary technology, a single rulebook and a complete and diversified set of services, while maintaining strong local input within our balanced federal governance.”
Euronext will provide ISE with its traded markets expertise, large customer base, state-of-the-art proprietary technology, and widespread distribution channels as well as a full suite of pre- and post-listing services to ISE equity issuers.
Somers added: “Euronext is hugely complementary to the ISE, bringing valuable expertise, financial strength, global relationships and technological capability as well as a global brand. These will enable our business to build further on its track record of international achievement and capitalise on new market and product opportunities emerging in Europe.”
The deal is expected to complete in Q1 2018.