London Stock Exchange Group PLC (LON:LSEG) has taken a 4.92% stake in Belgium-based clearing house Euroclear for €278.5mln.
The exchange said the investment in Euroclear will strengthen their existing relationship and provide “further opportunities for the companies deliver benefits to their customers through commercial collaboration and product development”.
READ: London Stock Exchange increases stake in LCH Group again
The LSE expects the deal to be earnings accretive.
It will fund the investment using existing cash and debt facilities but still sees its adjusted net debt to earnings (EBITDA) falling within its target range of 1-2 times following completion of the deal.
Euroclear provides settlement, custody and collateral management services across Europe with €28.2tn of assets under custody.
The financial services firm was founded in 1968 as part of J.P. Morgan & Co. to settle trades on the then developing euro-bond market.
"We are delighted to become a shareholder of Euroclear, with which we have a long-standing operational and commercial relationship,” said LSE chief executive David Schwimmer.
“Both LSE and Euroclear share the same open access philosophy and a customer partnership approach which is central to our businesses. We look forward to working with Euroclear to drive continued innovation and efficiencies for the benefit of our customers and the wider market."
Last month LSE agreed to pay €424.5mln to raise its holding in clearing house LCH Group Holdings by a further 15%, bringing its total stake to 83%.