€4.325bn cash acquisition of 100% of Borsa Italiana by Euronext

London Stock Exchange Group plc has agreed to sell 100% of the shares of London Stock Exchange Group Holdings Italia SPA, the holding company of the Borsa Italiana Group ("Borsa Italiana"), to Euronext N.V. for a cash consideration of €4.325bn.

Please find below a brief description of the deal announced in relation to the sale of the Borsa Italiana Group (“Borsa Italiana”), where Mediobanca acted as financial advisor to Euronext N.V. (“Euronext”):

Creation of the leading capital markets infrastructure in the European Union, strengthening Euronext’s leadership in European cash equities and diversifying its business mix by adding new capabilities in fixed income trading with MTS (leading European government bonds trading platform) and in the post-trade segment with Monte Titoli (Italian CSD) and CC&G (multi-asset clearing house).

Italy will become the largest revenue contributor to the combined group with 34% of the total 2019 combined revenues-

Borsa Italiana and Euronext will have a specific focus on small and medium-sized enterprises (“SMEs”), family-owned and tech companies, also aiming to develop ELITE in a pan-European framework.

The transaction is expected to be immediately accretive on adjusted EPS before synergies, and to deliver double digit accretion in year 3. Run-rate synergies are expected to achieve €60m, while restructuring costs are expected to amount to €100m.

The cash consideration will be financed through €0.3bn of existing cash, €1.8bn of new debt and €2.4bn of new equity to be issued, including a private placement of €0.7bn to CDP Equity and Intesa Sanpaolo, with CDP Equity acquiring a stake of 7.3% and Intesa Sanpaolo of 1.3%.

CDP Equity and Intesa Sanpaolo will join the group of Euronext’s long-term Reference Shareholders.

The combined group will have an Italian Chairman and CDP Equity will also have a representative at the Supervisory Board.

Completion of the transaction is expected in the first half of 2021, conditional to regulatory bodies, antitrust authorities and shareholders’ approvals. The potential transaction is also conditional upon the divestment of Borsa Italiana or a material part thereof being a condition of the European Commission’s clearance decision for LSEG’s proposed acquisition of Refinitiv.

The transaction confirms the strong ties developed by Mediobanca with international FIG clients like Euronext and with Italian Public institutions.