Euronext has agreed to buy a controlling stake in Nordic-focused central securities depository (CSD) VP Securities, boosting the European stock market operator’s presence in the region after its acquisition of the Oslo stock exchange in 2019.
Euronext said on Thursday it would buy 70 percent of the Danish firm’s share capital and voting rights. The deal gives the whole of VP Securities an enterprise value of 1.2 billion Norwegian crowns (€150 million), the two companies said.
VP Securities was created in 1980 in Copenhagen and offers national issuers with core CSD services as well as investor relations tools and sub-custody services. The company was the first Nordic CSD to be granted a CSDR license and to join the European Central Bank’s Target 2 Securities (T2S) settlement system.
Euronext expects the VP Securities deal to close by early Q3 2020 once regulatory approvals have been received.
Setting on €2.2 trillion of assets under custody, the acquisition strengthens Euronext’s post-trade activities and expands its presence in the Nordic region.
The exchange operators purchased the controlling stake from existing owners, the Danish Central Bank and four major Danish financial institutions, Danske Bank, Nykredit, Nordea and Jyske Bank. It also offers to buy 100% of the CSD operator’s shares from remaining shareholders, at the same terms and conditions.
“VP Securities will become a key component of Euronext’s post-trade strategy, alongside Euronext VPS in Norway and Interbolsa in Portugal, enhancing Euronext’s expertise in custody and settlement activities as well as the delivery of post-trade value-added services. Euronext will leverage this enlarged footprint to support the development of new post-trade services and upgraded technology for each of the Euronext CSDs, while maintaining highly reliable and cost-efficient services supporting each local ecosystem,” Euronext said in a statement.
Euronext, which runs exchanges in Paris, Brussels, Amsterdam, Lisbon, and Dublin completed in May 2019 the acquisition of Norway’s stock exchange. Franco-Dutch exchange operator offered 158 Norwegian crowns per share for Oslo Bors, valuing it at around 6.8 billion Norwegian crowns ($779 million), the same price offered by rival bidder Nasdaq Inc.
Euronext reported last year strong revenue growth, which was mainly owed to acquisition benefits of the Irish Stock Exchange which drove listing revenue at Europe’s largest exchange.