Royal Bank of Scotland Group (RBS) said it agreed to sell its shareholding in Euroclear plc — Europe’s biggest settlement house for securities — to New York Stock Exchange owner IntercontinentalExchange Holdings (ICE) for about £245 million.
“The transaction, which was also completed today, involved the sale of 148,349 ordinary shares in Euroclear plc for a total cash consideration of €275 million (approximately £245 million at current exchange rates), ” said RBS.
RBS said the sale proceeds will be used for general corporate purposes.
“The transaction is part of the continued reduction of assets in RBS and is in line with the bank’s plan to strengthen its capital position,” added RBS.
“The carrying value of the shareholding in Euroclear plc as at 30 June 2017 was approximately £88 million, which represents RWA equivalent of around £220 million.
“The transaction is expected to generate a gain of approximately £175 million after associated costs, reserves recycling and before tax, which will be recognised as a gain on strategic disposal in Q4 2017.”
KPMG Corporate Finance acted as financial advisers to RBS and Simmons & Simmons acted as legal advisers to RBS on this transaction.
Intercontinental Exchange said it acquired a 4.7% stake in Euroclear and anticipates having one representative join the Euroclear board.
“Euroclear is a leading provider of post-trade services, including settlement, central securities depositories and related services for cross-border transactions across asset classes,” said ICE.
ICE chief executive Jeffrey Sprecher said: “We are thrilled to become a shareholder of Euroclear.
“Euroclear’s infrastructure plays an increasingly important role as technology, collateral, risk management and regulation continue to drive an emphasis on post-trade services.
“This transaction demonstrates our continued focus on expanding our investments in mission critical clearing and risk management assets.
“We look forward to supporting Euroclear’s role as an independent provider of vitally important financial market infrastructure services.”