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Euronext Said to Eye Spanish, Italian Bourses in Quest for Scale

Bourse operator Euronext NV has been
studying potential acquisition targets including Spain’s Bolsas
y Mercados Espanoles SA as it hunts for deals to build scale and
enter new markets, people with knowledge of the matter said.
Euronext has discussed the idea of bidding for BME with
potential advisers, according to the people, who asked not to be
identified because the information is private. It has also been
reviewing whether to make an offer for Borsa Italiana should
London Stock Exchange Group Plc decide to sell the business to
secure regulatory approval for its Refinitiv takeover, the
people said.

Shares of BME have risen about 2% in Madrid trading this
year, giving it a market value of 2.1 billion euros ($2.3
billion). Euronext isn’t in any formal talks about a deal, and
it’s unclear how willing the owners of BME and Borsa Italiana
would be to a sale, the people said.

Euronext, led by former M&A banker Stephane Boujnah, hopes
to add to a string of recent acquisitions. The firm won a
foothold in the Nordics earlier this year, outmuscling Nasdaq
Inc. to acquire control of the Oslo bourse. Last year, it
purchased Irish Stock Exchange Plc, a hub for exchanged-traded

Representatives for Euronext, BME and LSE declined to

Buying BME would give Euronext greater access to trade-
clearing services and increased scale in another European
market. Analysts at Citigroup Inc. said last week that Euronext
has “impressive free cash flow” that could be used for a deal,
while BME has limited structural growth opportunities.
Exchange operators have been seeking deals that offer new
asset classes to reduce their dependence on low-margin cash
equities trading. Deutsche Boerse AG, which has about 2 billion
euros budgeted for M&A, agreed to buy analytics group Axioma
Inc. in April and was previously pursuing Refinitiv’s foreign-
exchange unit. SIX Swiss Exchange AG has said it could cut its
stake in French payments provider Worldline SA to fund

Large cross-border tie-ups have previously faced antitrust
concerns and shareholder resistance. Last month, Hong Kong
Exchanges & Clearing Ltd. scrapped its 29.6 billion-pound ($38
billion) bid for LSE after failing to win over investors.