London Stock Exchange Group plc (LSEG) has announced that it is in the process of acquiring further shares in LCH Group Holdings Limited (LCH), which will increase its majority ownership of this valuable strategic business.
LSEG has entered into agreements with certain minority shareholders of LCH to acquire up to a further 15.1% of LCH’s share capital which is expected to take its majority ownership to over 80%, subject to the pre-emption process contained within LCH’s Articles of Association (the “Acquisitions”). The total cash consideration payable by LSEG will be up to a maximum of €438m (£384m) (For reference, LCH’s profit after tax was €158m in 2017 and it has gross assets (net of balances with clearing members) of €1,625m.).
The Acquisitions will be funded from cash and existing debt facilities at closing and will be accretive to earnings following completion. Subject to regulatory non-objection, the Acquisitions are expected to close before the end of 2018.
The Acquisitions follow on from previous minority acquisitions by LSEG in late 2017 and early 2018, consistent with LSEG’s strategy of increasing its majority ownership while re-affirming its commitment to LCH’s customer partnership model with 14 minority shareholders remaining.
The following LCH shareholders are selling shares but will retain minority shareholdings in LCH: Bank of America Merrill Lynch, Barclays, JP Morgan, Morgan Stanley and Societe Generale. The following LCH shareholders are selling their entire stakes in LCH: Borsa Istanbul, CFT & Viel & Cie, Commerzbank, Deutsche Bank, Nasdaq and Nomura.