A recent deal has been concluded that means the London stock exchange will be purchasing the rest of the FTSE index from the publishing group Pearson. This will mean the LSE will own 100% of the international index and the deal is worth nearly half a billion pounds.
This is the largest acquisition by the LSE since it acquired Borsa Italiana back in 2007. In recent years the number of new products being launched by exchanges has increased as investors want to find it easier to get exposure in emerging markets and also be a trade in different classes of assets such as derivatives.
The Chief Executive of the LSE is Xavier Rolet and he has recently been purchasing assets so that the LSE can remain competitive with larger rivals such as the NYSE Euronet and the CME Group. The LSE is also currently engaged in talks with LCH Clearnet and it is expected that they might be buying a controlling interest in the clearing house.
The Chief Executive of the FTSE is Mark Makepeace and he has recently said, “We are one of the leading companies providing equity benchmarks and this makes us very capable of delivering fixed income products and derivatives.” Mr Makepeace will be remaining as chief executive after the deal is completed.
Mr Rolet has commented, “We know this business very well, we know that our customers expect a great choice and expect us to innovate and provide them with new opportunities. This new deal is going to give them an immediate ability to enhance their earnings.”
Doug Webb is the chief financial officer of the LSE and he said that the deal is going to be funded with £100 million in cash and also from a loan for £350 million which has been sourced from several banks.