European exchange operator and transaction services provider, Deutsche Brse, has signed a definitive agreement with the Bombay Stock Exchange (BSE) to invest in a 5 percent stake for Rs 189 crore at a price of Rs 5,200 per share (USD 42.7 million). The transaction puts the value of BSE of Rs 3,777 crore (USD 854 million).
The issue of shares is subject to relevant regulatory and shareholder approvals. Kotak Investment Banking advised BSE on the transaction.
“We are delighted to be partnering with Deutsche Brse,” says Rajnikant Patel, the managing director and CEO of the BSE. “The alliance is of long-term strategic importance designed to achieve several objectives in multiple asset classes in which we found Deutsche Brse to be very strong. This transaction is an important step for BSE towards realising its mission to ‘Emerge as the premier Indian stock exchange by establishing global benchmarks’. In terms of business, profitability and market capitalisation, Deutsche Brse ranks among the top exchanges of the world. This is a firm beginning towards bringing the global markets to India.”
“The strategic partnership with BSE is a very important step for us towards expanding Deutsche Brse’s activities in Asia,” adds Reto Francioni, the CEO of Deutsche Brse. “We see the exchange business becoming increasing global and this partnership is our joint effort to benefit from each other’s strengths while establishing a presence in multiple time zones and regulatory environments.”