Swiss company SIX on Thursday became Europe’s third largest stock exchange operator by revenues after completing a 2.57 billion euros ($2.9 billion) takeover of Spanish rival BME, forming a base for European Union expansion.
The takeover deal — which values the company at 2.8 billion euros — marks the end of the independence of the Spanish bourse that was founded in 1831.
The acquisition of one of Europe’s last standalone stock exchanges comes at a time when the industry is struggling with lower fees and declining revenues, though market volatility in March due to the COVID-19 outbreak temporarily increased trading income.
SIX’s chief executive officer Jos Dijsselhof told a virtual news briefing on Thursday that for now the Swiss company was not planning to delist BME as the acceptance level for the bid had not surpassed a 95% threshold. He also said the listing of SIX was not “an active plan at the moment.”
SIX’s all-cash takeover bid was accepted by owners of 77,899,990 BME shares, representing a 93.16% of the Spanish company’s capital, Spain’s CNMV market regulator said.
When SIX submitted its offer in November, it said it was subject to a minimum acceptance condition of 50% plus one share.
Dijsselhof said SIX remained committed to maintaining BME headquarters and operations for at least 10 years and also said that the company was not planning to engage in massive layoffs in Switzerland or in Spain.
On Friday, Dijsselhof added: “Of course, we will look also at savings, wherever there is duplication, wherever there are platforms where we think we can provide both markets with the services from one platform we will look into that, but the real aim of this deal is to reinvest those savings and reinvest our earnings into new products and services,” he told CNBC.
“We are looking at bringing products and services that BME has that we don’t have on the SIX side to our customers there and the other way around, so really cross sale those services across the two markets, bringing the data business and the payments business also into the Spanish geography. And I look at our global landscape in Latin America and Asia where SIX has strong ties to further build that out, so it is really a growth story, it is combining two forces creating a more efficient platform.”
With major exchange players in Europe Deutsche Boerse and London Stock Exchange LSE effectively too big to consolidate without raising competition concerns, smaller exchange operators have become more attractive targets.
Paris-based Euronext, which has already scooped up Dublin and Oslo exchanges, initially expressed an interest in buying BME, but did not submit a counter-bid.
Dijsselhof said that BME would give SIX an opportunity to look at further expanding its business to more customers in the EU.
After adjusting for dividends, SIX’s takeover offer was 32.98 euros per share in cash.
Shares in BME closed 0.061% higher at 32.80 euros.
BME recently said its dividend payout policy, currently around 90% of net profit, is likely to come down, although SIX has not yet made any decision.