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Euronext Announces Irrevocable All-cash Offer To Acquire Clearnet - Quick Facts

Euronext (ENXB.BE,ENX.BR,ENX.AS,ENX.PA) announced it has signed a binding offer and been granted exclusivity to acquire 100% of the share capital and voting rights of Clearnet, an EMIR-authorised Eurozone-based Central Counterparty, a 100% subsidiary of LCH.Clearnet Group, founded following the merger of the London Clearing House and Clearnet SA in 2013. Euronext will fund the purchase price of 510 million euros through a combination of debt facilities and existing cash.

An Extraordinary General Meeting of Euronext's shareholders will be held to approve the transaction and will be convened for mid-February 2017. The Managing Board and the Supervisory Board of Euronext have unanimously approved the transaction. Euronext expects the transaction to be double-digit accretive to earnings from the first full year post completion, excluding integration costs and before synergies.

Euronext said the contemplated transaction is expected to generate significant cost synergies, the majority of which are anticipated to be delivered by 2020: annual pre-tax operating cost synergies are expected to amount to circa 13 million euros per year (on a gross basis); one-off costs related to transaction expenses, the carve-out and integration of Clearnet and the implementation of the cost optimisation plan are estimated at circa 40 million euros. The company said additional revenue synergies have also been identified resulting from the launch of trading in new products, in particular targeted at the clients of Clearnet's Fixed Income and CDSClear businesses, and clearing related to additional Euronext products.

Clearnet generated gross income of 137 million euros, EBITDA of 65 million euros and profit after tax of 36 million euros in 2015, and had shareholders' equity of 301 million euros June 2016. Clearnet has 189 employees and is headquartered in Paris with branches in Amsterdam and Brussels as well as a representative office in Porto. The transaction is expected to close towards the end of second quarter 2017, concurrent with closing of the Deutsche Boerse / LSEG merger.

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