Financial institutions M&A: Sector trends - January 2021
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Stock Exchanges/Clearing Houses/Trading Venues

Financial institutions M&A sector trends: stock exchanges/clearing houses/trading venues — H2 2020 and outlook for 2021

Market infrastructure juggernauts thunder the M&A plains—vertical integration remains a key focus




  • High M&A activity levels


  • European juggernauts thunder the M&A plains—differing prerogatives:
    • Horizontal growth (e.g., Euronext's acquisition of Borsa Italiana, WSE's acquisition of controlling stake in AMX, etc.)
    • Vertical integration (e.g., Deutsche Börse's acquisition of majority equity interest in Institutional Shareholder Services)
    • Transatlantic reach (e.g., Deutsche Börse's acquisition of majority equity interest in Quantitative Brokers)
    • New world securities (e.g., SIX's acquisition of majority equity interest in Custodigit)
  • Cashing out of 'liquid' investments:
    • Sovereign wealth funds (e.g., Türkiye Varlık Fonu's disposal of 10% of Borsa İstanbul)
    • Asset managers (e.g., First Investment Co.'s disposal of 14.407% of Boursa Kuwait


  • Regulators and politicians intervene in deal-making:
    • Competition authorities make a stand against market foreclosure risks (e.g., LSE's disposal of Borsa Italiana)
    • Central banks encourage diversification of ownership of critical market utilities
    • Local governments reserve ownership of domestic core infrastructure businesses (e.g., Italian government's extension of CONSOB's veto powers in respect of direct/indirect sales/ purchases of ≥10% stakes in Borsa Italiana)
  • Key utility players:
    • Engage in opportunistic M&A (e.g., availability of Borsa Italiana on account of LSE’s desire to secure EU antitrust approval for acquisition of Refinitiv)
    • Focus M&A firepower on verticals less likely to attract antitrust scrutiny (e.g., trade reporting, proxy advisory, digital asset custody, etc.)


  • Banks seeking to offload 'liquid' financial market infrastructure stakes as the risk of the COVID-19 pandemic precipitating a credit crunch intensifies
  • Financial sponsors openly taking issue with interventionist approach of local European governments
  • UK seeking to encourage London listings by businesses of all sizes, post-expiry of Brexit transition period (i.e., revival of AQSE market aimed at micro-cap companies)



Competition for prized financial utilities to remain high despite the longer-than-originally-anticipated effects of the COVID-19 pandemic (e.g., Deutsche Börse, Cassa Depositi e Prestiti and Intesa Sanpaolo's rumoured competing bids for Borsa Italiana).


Other financial services—Publicly reported deals & situations

Inorganic growth

Deal highlight:

White & Case represented the Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, on its US$200 million acquisition of a 10% stake in Borsa İstanbul, the primary stock exchange operator in Turkey, from the Turkey Wealth Fund, the sovereign wealth fund of the Republic of Turkey.

  • Moscow Exchange (Kazakhstan): Acquisition of 13.1% of Kazakhstan Stock Exchange (December 2020)
  • Euronext (Italy): Acquisition of Borsa Italiana (October 2020)
  • Cboe Global Markets (Clearing): Acquisition of European Central Counterparty (July 2020)
  • SGX (Cloud-based institutional trading platform): Acquisition of remaining 80% of BidFX (June 2020)


Swapping horizontal for vertical reach

  • SIX (Switzerland): Acquisition of majority equity interest in Custodigit (December 2020)
  • MarketAxess (Germany): Acquisition of Deutsche Börse's Regulatory Reporting Hub (December 2020)


International expansion

  • Deutsche Börse (Proxy advisory): Acquisition of 80% of Institutional Shareholder Services (November 2020)
  • Warsaw Stock Exchange (Armenia): Acquisition of 65% of Armenia Securities Exchange (September 2020)
  • Deutsche Börse (US): Acquisition of majority stake of Quantitative Brokers (September 2020)


Offloading of 'liquid' stakes

  • Turkey Wealth Fund: Disposal of 10% of Borsa İstanbul (December 2020)
  • Deutsche Börse: Disposal of Regulatory Reporting Hub (December 2020)
  • London Stock Exchange (Italy): Disposal of Borsa Italiana (October 2020)
  • First Investment Co.: Disposal of 14.407% of Boursa Kuwait (July 2020)


Click here to download 'Financial services M&A stages a herculean comeback in H2 2020, finishing the year on a high' PDF.


Financial institutions M&A: Sector trends

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