Euronext to acquire Danish CSD to bolster post-trade business

Deal for VP Securities will give the European exchange group a CSD presence in the Nordics and boost its post-trade offering.

By Jonathan Watkins

Euronext has agreed to acquire Danish Central Securities Depository (CSD) VP Securities in a move to strengthen its post-trade business and its presence in the Nordics.

The price offered for 100% of the shares is €150 million and double’s Euronext’s depositary business in size.

The definitive agreement will see the European exchange group acquire 70% of the shares of VP Securities from its existing owners, the Danish Central Bank and four major Danish financial institutions, Danske Bank, Nykredit, Nordea and Jyske Bank

The move is aimed at boosting Euronext’s expertise in custody and settlement activities as well as the delivery of post-trade value-added services.

VP Securities, which has more than €1.2 trillion of assets under custody and settled 16.6m securities as of the end of 2019, will join Euronext VPS in Norway and Interbolsa in Portugal under the post-trade suite.

“The acquisition of VP Securities represents a major new milestone in the deployment of Euronext’s ambition to build the leading pan-European market infrastructure,” Stéphane Boujnah, chief executive officer and chairman of the managing board of Euronext.

“The acquisition of VP Securities will position Euronext as a leading CSD operator in Europe, and as a leading player in the Nordic region because there is no European success without a Nordic dimension. This reinforcement of our post-trade activities will allow Euronext to pursue the diversification of its topline.  

Established in 1980 and headquartered in Copenhagen, VP Securities is fully integrated into the European post-trade framework and was the first Nordic CSD to be granted a CSDR license and to join the European Central Bank’s Target 2 Securities (T2S) settlement system.

The completion is expected by early Q3 2020 once regulatory approvals have been received. 

”In a market changing from a predominantly national market to a European market, economies of scale will matter even more to be able to offer competitive services to the customers and ensure continued investments in new technology,” said Peter Lybecker, chairman of the board of directors of VP Securities. “I expect that the advantages which VP Securities may obtain as part of the Euronext Group will strengthen the Danish infrastructure within post-trade services.”