Euronext announced it’s entered into definitive agreements to acquire 70% of the shares of VP Securities from its existing owners, the Danish Central Bank and four major Danish financial institutions, Danske Bank, Nykredit, Nordea and Jyske Bank. The agreement follows the acquisition of Oslo Børs VPS, completed in June 2019, and Nord Pool in January 2020, and is expected to complete by early Q3 2020.
VP Securities is the Danish Central Securities Depository (CSD), covering fixed income, equity and investment funds, with more than €1.2tn of assets under custody and 16.6m securities settled in 2019. The transaction will double Euronext’s central securities depository business in size.
The price offered for 100% of the shares is DKK1.12bn (€150mn/$162.6mn). Euronext will open an offer to all remaining shareholders, at the same terms and conditions. The transaction will be funded with existing resources. Following this acquisition, post-trade will be a major contributor to Euronext revenues, significantly increasing the share of non-volume related revenue.
Peter Lybecker, chair of the Board at VP Securities, said in a statement: ”In a market changing from a predominantly national market to a European market, economies of scale will matter even more to be able to offer competitive services to the customers and ensure continued investments in new technology. I expect that the advantages which VP Securities may obtain as part of the Euronext Group will strengthen the Danish infrastructure within post-trade services.”
Stéphane Boujnah, CEO and chair of Euronext’s managing board said in a statement: “The acquisition of VP Securities represents a major new milestone in the deployment of Euronext’s ambition to build the leading pan-European market infrastructure. The acquisition of VP Securities will position Euronext as a leading CSD operator in Europe, and as a leading player in the Nordic region because there is no European success without a Nordic dimension. This reinforcement of our post-trade activities will allow Euronext to pursue the diversification of its topline. With about 200 talented employees, VP Securities will enable Euronext to further enhance its custody and settlement offering to deliver new and improved services for the benefit of the Danish real economy and European capital markets.”