London Stock Exchange Group unveiled the first deal under its new leadership, agreeing to take a minority stake in settlement giant Euroclear Holding.
The purchase of a 4.92% stake marks the LSE's first external acquisition since David Schwimmer started as chief executive in August. It gives the London bourse a board seat alongside U.S. rival Intercontinental Exchange, which has built a 10% stake in Euroclear over the past two years.
Belgium-based Euroclear is an essential piece of market infrastructure, providing settlement, custody and collateral management services across Europe. It holds €28.6 trillion ($32.7 trillion) in assets and settles €733 trillion in securities transactions each year. It has historically been majority owned by banks.
The LSE's €278.5 million investment values Euroclear at about $6.4 billion, according to figures in a company filing. The transaction will be funded from existing cash and debt facilities.
"It's not the fireworks cross-border M&A deal, but doesn't bring it into a fraught political competition dynamic that a bigger transaction does," Redburn analyst Russell Quelch said. "Strategically it makes sense."
Since October, the London exchange has also made several share purchases in LCH Group Holdings, the clearing house that it already controls.