ICE considers bid for LSE; deal would create transatlantic ETF exchange giant

Mar 1st, 2016 | By | Category: ETF and Index News

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Atlanta-headquartered Intercontinental Exchange (ICE), owner of the NYSE Arca, the US’s leading exchange-traded funds market, has put out a statement confirming that it is considering a bid for the London Stock Exchange Group (LSEG). The statement follows an announcement last week from LSEG that it was in talks over a merger with Deutsche Boerse.

ICE considers bid for LSE; deal would create transatlantic ETF exchange giant

ICE has announced that it is considering entering the fray for the LSE in a deal that would create a transatlantic ETF exchange giant.

The teaming of the pair would bring together two of the world’s largest exchange groups, and create a major transatlantic player in the ETF market.

NYSE Arca has 1,561 ETPs listed, representing over $2 trillion in assets under management (AUM) or nearly 94% of US ETP AUM, and 21% market share of ETP trading volume as of February 16, 2016, the highest of any US exchange.

Should the deal go ahead it would see ICE expanding back into the European exchange sector, acquiring two of the most active European listings and trading markets – London’s LSE and Italy’s Borsa Italiana –  for ETFs.

The transaction would come just a couple of years after ICE spun off Euronext, a competitor to LSEG in Europe. Euronext’s ETF platforms, which operate as subsidiaries and include Paris, Luxembourg, Amsterdam and Lisbon, accounted for market share worth 20.2% in European ETF trading last year, according to data from Deutsche Bank.

Initially reported by Bloomberg, a note from ICE confirmed the rumours, but added that “no approach has been made to the Board of LSEG, and no decision has yet been made as to whether to pursue such an offer. There can be no certainty that any offer will be made, nor as to the terms on which any offer will be made. A further announcement will be made as appropriate.”

ICE has been pushing into Europe over the last twenty years with several acquisitions, including the International Petroleum exchange in 2001, the London derivatives exchange Liffe in 2013 and energy trading platform Trayport in 2015.

Shares in LSEG hit a high of £29.14, up 8.8% on yesterday’s close.

An offer must be made by 5pm on 29th March 2016.

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