London Stock Exchange Group plc (“LSEG”) announces 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)*. 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.
* 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.
Notes to editors
LCH is a group of leading global multi-asset clearing houses that provides proven risk management capabilities across a range of asset classes. LCH operates clearing houses around the world, with clearing houses incorporated in the UK, France and the United States with additional offices in the Asia Pacific region. It offers clearing services across asset classes including OTC and listed rates; CDS and FX; fixed income; commodities; cash equities and equity derivatives. LCH also serves the non-cleared derivatives market through LCH SwapAgent. LCH is majority owned by London Stock Exchange Group (LSE.L), an international markets infrastructure business. Marshall Bailey OBE is Chairman of LCH Group and Daniel Maguire is CEO, LCH Group.
This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond LSEG’s control and all of which are based on its respective directors' current beliefs and expectations about future events. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect LSEG’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to LSEG’s business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date of this announcement and cannot be relied upon as a guide to future performance. LSEG expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise, unless required to do so by applicable law or regulation.
No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per LSEG ordinary share for the current or future financial years would necessarily match or exceed the historical published earnings per LSEG ordinary share.