Italy Is Said to Be Under Pressure to Delay Euronext-Borsa Deal

Pressure is mounting on Italy’s government to delay the acquisition of Borsa Italiana SpA by Euronext NV unless the Milan-based exchange is assured more autonomy and decision-making power, according to people familiar with the matter.

The deal would create Europe’s largest listing venue, which Euronext has long maintained could become the backbone of a future European capital markets union.

London Stock Exchange Group Plc in October agreed to sell Borsa to Euronext and two Italian lenders for more than 4.3 billion euros ($5.1 billion). Borsa has since developed concerns over the agreement because it would concentrate power in Paris instead of creating a pan-European market, the people said on condition of anonymity.

Those concerns have now reached Italy’s parliament, where a related motion drawn up by parties from the ruling coalition will be debated on Wednesday. A draft document seen by Bloomberg calls for enhanced security for the country’s “strategic assets” and a more central role for Italy within Euronext.

Regulatory Approval

The European Commission -- the European Union’s executive arm -- has approved Euronext as a buyer in the deal, and the company has said it expects to complete the purchase in the first half of this year. The transaction is still subject to regulatory approvals and Italian market watchdog Consob is also examining the deal.

Adding Borsa Italiana would give Euronext about a quarter of all equity and trading in Europe, with 28 of the Euro Stoxx 50 companies. That means Euronext would derive more than a third of its sales from Milan, a key reason the Italian side is pushing for a different distribution of power, the people said.

Among the Italian requests are an investment plan that takes Borsa’s size and contribution into account, autonomy as part of a federation of European exchanges rather than a vertical model with Paris calling the shots, and a possible chairmanship of the managing board, the people said. In the current deal Italy was given chairmanship of the supervisory board.

A spokesman for Euronext declined to comment on the parliamentary discussion. An Italian government spokesman and a Borsa Italiana spokesperson also declined to comment.

Euronext made its bid for Borsa alongside Italy’s state-backed lender Cassa Depositi & Prestiti SpA and Intesa Sanpaolo SpA, the country’s biggest bank. The two would have stakes of 7.3% and 1.3% respectively.

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