Euronext Continues Diversification Drive into Foreign Exchange with FastMatch Acquisition

Euronext to acquire 90 percent stake in spot FX trading network FastMatch as exchanges continue their move into investment bank domain

forex
The global FX market, which trades $5.1 trillion a day, is proving an attractive option for exchange operators like Euronext.

Pan-European exchange operator Euronext is to enter the foreign-exchange (FX) market through the acquisition of a 90 percent stake in spot FX trading electronic communication network (ECN), FastMatch.

The acquisition of FastMatch for an initial cash consideration of $153 million is Euronext’s first entrance into the $5.1 trillion daily FX market, as the organization continues to diversify its product offering and technology investments as part of its “Agility for Growth” corporate strategy.

FastMatch, established in 2012 by Credit Suisse and Forex Capital Markets (FXCM), provides buy-side and sell-side clients with access to diversified FX liquidity pools through datacenters in London, New York and Tokyo. The acquisition, pending regulatory approval, is expected to close in Q3 2017 and FastMatch management will retain a 10 percent stake in the business.

“The acquisition of FastMatch breaks new ground for Euronext through expansion into the FX market, the world’s largest traded asset class,” said Stéphane Boujnah, CEO of Euronext. “This will broaden the spectrum of products we provide to capital market users, whilst meaningfully diversifying our revenue and creating long-term value and growth for customers and shareholders.”

Euronext has become the latest exchange operator to venture into the global FX marketplace, historically an area of dominance for investment banks, after Deutsche Börse splashed out €725 million ($796 million) on foreign-exchange platform 360T in October 2015, while Bats Global Markets acquired institutional spot FX market Hotspot from KCG Holdings for $365 million at the start of the same year.

Euronext is also in the process of establishing its second dark pool venue, a multilateral trading facility (MTF) for block trading in European equities, scheduled to launch in the middle of this year. Danielle Mensah, head of cash markets and deputy head of markets and global sales at Euronext, spoke to Waters earlier this year on how the MTF will “bridge the gap between human trading and electronic execution.”

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