Exchange holding company Cboe Global Markets (CBOE) announced Tuesday that it has entered into a definitive agreement to acquire EuroCCP, a pan-European equities clearing house.
The transaction, which Cboe plans to fund with cash on hand, would close in the first half of 2020, pending the receipt of required regulatory clearances. The deal also requires the arrangement of a supporting liquidity facility at the EuroCCP clearing entity level.
Cboe expects its ownership of EuroCCP would provide opportunity to pursue the development of equity derivatives trading and clearing capabilities in the region, subject to regulatory approvals.
The company said its 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.
Amsterdam -based EuroCCP is equally owned by Cboe Europe, Euronext, Nasdaq, ABN AMRO Clearing Bank and The Depository Trust & Clearing Corp. or DTCC. EuroCCP currently clears trades for 39 trading venues, which represent close to 95 percent of Europe's equity landscape. It clears on average between four to five million trade sides daily, totaling 30 billion euros to 40 billion euros in value.
Meanwhile, Euronext announced its binding deal to sell its 20% minority stake in EuroCCP to Cboe, alongside the other current EuroCCP shareholders. Euronext expects to receive net proceeds of approximately 9 million euros from the sale of its minority stake.