Euronext stock opened the new year with a bang on Tuesday after it emerged the exchange operator will buy the French clearing operation of London Stock Exchange (LDNXF) in a €510 million ($532 million) deal.
London Stock Exchange is divesting LCH ahead of a planned merger with Germany's Deutsche Boerse (DBOEY) as part of an effort to please regulators who are investigating the competition aspects of the deal. The LCH sale is conditional upon the LSE and Deutsche Boerse merger being successful.
LCH is the French subsidiary LCH Clearnet, which was formed through the 2003 merger of London Clearing House and France's Clearnet. The up-for-sale subsidiary has gross assets of €260 billion and net assets of €303 million. It generated a net profit of €36 million for the year ending Dec. 31, 2015.
Euronext stock rose by around 2.6% shortly after the opening bell to trade at €39.83, shares have lost 15.7% in the last 52 weeks.
London Stock Exchange shares were up 0.8% to 2,899 pence, having gained 6% in the past 52 weeks.
London Stock Exchange is attempting to tie up a $25 billion merger with Germany's Deutsche Boerse, which has been pitched by both management teams as a merger of equals.
The combined company will be dual headquartered between London and Frankfurt, while being led by Deutsche Boerse CEO Carsten Kengeter.
In the early days the Deutsche Boerse deal looked like it might be scuppered by competition from Intercontinental Exchange (ICE - Get Report) , the U.S. owner of the New York Stock Exchange, which has long-harbored ideas of a merger with its London-based rival.
But after ICE came out and said that it will not pursue LSE, the greatest threat to the deal now comes from European competition regulators, who have launched an in depth review - due to concerns over the combined entities dominance in clearing and other areas.