LCH.Clearnet in discussions to acquire IDCG
First Published 24th April 2012
LCH.Clearnet in non binding agreement with NASDAQ OMX and IDGC re acquisition of the latter
Michael Davie, Chief Executive, SwapClear
"This strategic acquisition would complement our U.S. offering, where we are seeing accelerating client take-up for the SwapClear service."
LCH.Clearnet Group Limited has announced that it has signed non-binding heads of agreement with International Derivatives Clearing Group, LLC ("IDCG") and The NASDAQ OMX Group, Inc. ("NASDAQ OMX") regarding the acquisition of IDCG. The transaction would represent the latest move by LCH.Clearnet Group to further enhance the range and flexibility of its clearing solutions and would facilitate its recently announced U.S. cross-margining initiative.
LCH.Clearnet Limited ("LCH.Clearnet") already operates interest rate swap clearing in the U.S. through its SwapClear service. The acquisition of IDCG would be further testament to LCH.Clearnet's commitment to the U.S. marketplace and its aim of providing buy-side participants with more choice.
The acquisition of IDCG remains subject to negotiations and certain conditions including entering into a definitive agreement and there can be no certainty that the transaction will proceed. It is envisaged that if the transaction proceeds LCH.Clearnet Group would become the sole owner of IDCG and NASDAQ OMX would become a shareholder of LCH.Clearnet Group.
"LCH.Clearnet Group is committed to providing end-users with a broad range of clearing services for their over-the-counter trades. This strategic acquisition would complement our U.S. offering, where we are seeing accelerating client take-up for the SwapClear service," said Michael Davie, Chief Executive of SwapClear.
"This is an exciting, strategic opportunity which would extend the choice in our SwapClear client offering. It is further evidence of our commitment to the U.S. market and would provide us with additional opportunities to grow in the future," said Ian Axe, Chief Executive of LCH.Clearnet Group.
"NASDAQ OMX is an innovator and an early adopter of changes in market structure, including areas like OTC derivatives clearing," said Eric Noll, Executive Vice President of Transaction Services U.S. and U.K. at NASDAQ OMX. "As a future shareholder and a supporter of horizontal clearing models for our global marketplace, we are pleased to begin our strategic relationship with LCH.Clearnet on both sides of the Atlantic."