Deutsche Börse, eyeing a merger with the London Stock Exchange, has agreed to sell its U.S. options platform International Securities Exchange for $1.1 billion to Nasdaq, exiting a market that has sharply lost value since the financial crisis and where it saw little chance of become a top player.
The sale of the U.S. operations, which Deutsche Börse bought for $2.8 billion in 2007, at the height of the financial boom, will also raise some much-needed additional cash. That could be used to improve an all-share transaction to merge with the London Stock Exchange and become the world’s second-largest trading house.
“One could conjecture that it wants to hoard cash to – when needed – raise or improve its offer,” said Dieter Hein, an analyst at research firm Fairesearch located near Frankfurt.
An improved offer might be necessary if rivals try to scupper the deal: Days after the Frankfurt-based bourse announced it was in merger talks with the LSE, Atlanta-based Intercontinental Exchange said it might make a counter offer for LSE, while Bloomberg reported last week the Chicago Mercantile Exchange was considering the same.