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Euronext, the pan-European exchanges operator, has moved swiftly from missing out on the €510m purchase of LCH’s French unit by agreeing to move its derivatives and commodities clearing operations to rival Intercontinental Exchange.
The Paris-based exchanges operator has agreed a 10-year deal to use the clearing services of ICE’s Dutch business from the second half of 2018, and end a long-standing relationship with LCH.Euronext accounts for nearly half of LCH France’s business and has a contract with the clearing house that expires at the end of 2018.
It had hoped to pick up LCH SA, which was offered by the London Stock Exchange Group as a concession to European antitrust regulators to bless its merger with Deutsche Borse. Last week Brussels blocked the deal and the LSE’s provisional deal with Euronext was unwound.
Stéphane Boujnah, chief executive, said Euronext:
Continues to remain a willing buyer of Clearnet but in the absence of an agreement is fully committed to securing the best long-term solution for its post-trade activities, in the interests of clients and shareholders.
Euronext will contribute a €10m upfront investment in ICE Clear Netherlands. Clearing operations will be run from Amsterdam and a new business for asset financing, inventory management and physical delivery for commodities will be built by Euronext and operated from Paris.
Euronext has been reviewing all its clearing agreements with LCH and last year bought a 20 per cent stake in EuroCCP for its cash equities business.