Euroclear, the world’s biggest provider of domestic and cross-border settlement, has finalised its takeover of CIK, the central securities depository of Belgium.
CIK is 100% owned by Euronext, the pan-European exchange. It has more than E115bn worth of securities under custody, and is widely regarded as the biggest depository settling paper-based transactions in Europe.
The deal means Euroclear now controls five national and international depositories. In a joint statement with Euronext, Euroclear said the CIK acquisition represented “another important milestone in the ongoing process of consolidating and rationalising Europe’s post-trade processing infrastructure”.
The transaction, which is subject to regulatory approval and due diligence, will be completed in the first half of next year. CIK is to become a fully owned subsidiary of the new Euroclear holding company, Euroclear SA.
The CIK deal is the latest in a string of takeovers for Euroclear. In 2001, it snapped up Sicovam, France’s central depository. A year later it bought Necigef, the central depository of the Netherlands, while last year it acquired Crest in the UK.
Under a 2001 agreement, Euroclear had initially agreed to buy only CIK’s book-entry settlement and custody business. Under the new deal, Euroclear will also take over CIK’s paper-based settlement.
Euroclear said the decision to fully take over CIK was prompted by its increased focus on acceleration of settlement-platform consolidation for the Euronext markets.
Commenting on the deal, Pierre Francotte, chief executive officer of Euroclear Bank said the takeover will give its Belgian clients “the opportunity to accrue maximum benefit from the consolidated settlement and custody platform that we are committed to delivering to Euronext market users by 2007”.
Jean-Francois Theodore, chairman of the managing board and CEO of Euronext, said the acquisition will “facilitate the completion of Euronext’s business model, leading ultimately to a single order book across the Euronext markets”.
Euronext consists of the equity and derivatives markets in Brussels, Amsterdam and Paris. It is the biggest cash securities market in Europe.