Transaction brings together two pan-European organizations that
have long championed competition, open access and clearing
interoperability in Europe
Ownership of EuroCCP expected to enhance Cboe's current European
equities business and create pathway for equity derivatives trading
and clearing in the region
Deal expected to close in first half of 2020
CHICAGO and LONDON, Dec. 10,
2019 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe:
CBOE), one of the world's largest exchange holding companies, today
announced it has entered into a definitive agreement to acquire
EuroCCP, a leading pan-European equities clearing house. The
transaction will bring together two companies that have long
championed competition, open access and clearing interoperability
in Europe. Additionally, Cboe's ownership of EuroCCP is
expected to provide opportunity to pursue the development of equity
derivatives trading and clearing capabilities in the region,
subject to regulatory approvals.
![](https://mma.prnewswire.com/media/622233/Cboe_Logo.jpg)
The two companies are closely aligned on a vision to further
expand the benefits of EuroCCP's open-access model serving other
exchanges and trading venues. EuroCCP currently clears trades
for 39 trading venues, which represent close to 95 percent of
Europe's equity landscape, making
it the most connected equity central counterparty (CCP) in the
region. EuroCCP clears on average between four to five million
trade sides daily, totalling €30 to €40 billion in value, and
provides clearing members with easy access and the ability to
maximize operational efficiency and netting opportunities while
reducing risk and cost. Cboe sees an opportunity to further grow
this business by capitalising on the strength of its pan-European
network.
Ed Tilly, Chairman, President and
Chief Executive Officer of Cboe Global Markets said, "Cboe's
planned acquisition of a leading equities clearing house in
Europe is an important step in our
growth strategy for the region. We believe ownership of EuroCCP
will enhance our current European equities business, while
providing opportunities to potentially diversify our business,
including trading and clearing derivatives, in the future. We look
forward to officially welcoming the EuroCCP team to Cboe Global
Markets."
David Howson, Chief Operating
Officer of Cboe Europe said, "As Europe's leading pan-European
equities clearing house, EuroCCP is essential to providing
cost-effective clearing and trading competition in European capital
markets that benefits all market participants. We are committed to
maintaining and extending these benefits to customers throughout
the region. We are optimistic that we can further grow the EuroCCP
business by leveraging our track record of innovation and strong
customer relationships to create vibrant, efficient pan-European
market infrastructure."
Cécile Nagel, Chief Executive Officer of EuroCCP said,
"Cboe is a staunch advocate of open access and interoperability,
values which EuroCCP has long promoted, with an established track
record of servicing clients globally and providing innovative
products across numerous asset classes. We believe this transaction
positions EuroCCP for continued success and we look forward to
becoming part of the Cboe group. EuroCCP remains committed to
offering a best-in-class service with leading client
satisfaction."
While the company expects its plans to acquire EuroCCP and
pursue equity derivatives trading and clearing in Europe to generate positive financial returns
longer-term, these initiatives are expected to be dilutive to
earnings over the next three to four years. The potential impact to
earnings per share is currently expected to be in the range of
$0.08 to $0.10 for 2020 and 2021. The estimated earnings
per share impact is as follows: (1) a portion reflects the
potential acquisition of EuroCCP, representing about half of the
estimated earnings per share impact in 2020 and neutral to slightly
positive estimated earnings per share impact in 2021 and (2) the
remaining portion in 2020 and 2021 primarily reflects Cboe's
planned investment in building out its European derivatives
clearing and trading business. This investment is expected to
have the greatest negative earnings impact in the first few years
as the company ramps up its European derivatives trading and
clearing and builds sufficient scale. The potential expense impact
from these initiatives is not reflected in the company's 2020
expense guidance that was reaffirmed on November 1, 2019. Cboe looks forward to
providing further insights into its European equity derivatives
trading and clearing initiatives in the coming months.
EuroCCP is headquartered in Amsterdam and regulated by De Nederlandsche
Bank and by Autoriteit Financiële Markten. EuroCCP is equally owned
by Cboe Europe, Euronext, Nasdaq, ABN AMRO Clearing Bank and The
Depository Trust & Clearing Corporation (DTCC).
The transaction, which Cboe plans to fund with cash on hand, is
expected to close in the first half of 2020, pending the receipt of
required regulatory clearances and the arrangement of a supporting
liquidity facility at the EuroCCP clearing entity level.
PJT Partners acted as exclusive financial advisor to EuroCCP,
Allen & Overy acted as exclusive legal counsel to EuroCCP and
Greentarget acted as communications strategy advisor to EuroCCP on
the transaction. Cboe's legal counsel on the transaction was
Macfarlanes LLP and Norton Rose Fulbright LLP.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) is one of the world's largest
exchange holding companies, offering cutting-edge trading and
investment solutions to investors around the world. The company is
committed to defining markets to benefit its participants and drive
the global marketplace forward through product innovation, leading
edge technology and seamless trading solutions.
The company offers trading across a diverse range of products in
multiple asset classes and geographies, including options, futures,
U.S. and European equities, exchange-traded products (ETPs), global
foreign exchange (FX) and volatility products based on the Cboe
Volatility Index (VIX Index), recognized as the world's premier
gauge of U.S. equity market volatility.
Cboe's subsidiaries include the largest options exchange and the
third largest stock exchange operator in the U.S. In addition, the
company operates the largest stock exchange by value traded in
Europe and is a leading market
globally for ETP listings and trading.
The company is headquartered in Chicago with a network of domestic and global
offices across the Americas, Europe and Asia, including main hubs in New York, London, Kansas
City and Amsterdam. For
more information, visit www.cboe.com.
Cboe Europe Limited is a Recognised Investment Exchange
regulated by the Financial Conduct Authority. Cboe Europe Limited
is a wholly-owned subsidiary of Cboe Global Markets, Inc. and is a
company registered in England and
Wales with Company Number 6547680
and registered office at The Monument Building, 11 Monument Street,
London EC3R 8AF. This has been
established for information purposes only. None of the information
concerning the services or products described in this document
constitutes advice or a recommendation of any product or service.
To the extent that the information provided in this document
constitutes a financial promotion as defined by section 21 of the
Financial Services and Markets Act 2000, it is only directed at
persons who qualify as a Professional Client or Eligible
Counterparty. Persons who do not qualify should not act on or rely
upon it.
Media
Contacts
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Analyst
Contact
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Europe:
Stacie
Fleming
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U.S.:
Angela
Tu
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Debbie
Koopman
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+44-20-7012-8950
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+1-646-856-8734
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+1-312-786-7136
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sfleming@cboe.com
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atu@cboe.com
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dkoopman@cboe.com
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