Nyse Euronext has agreed to sell its stake in MBE Holding, the joint venture company that owns the MTS fixed income network, to Borsa Italiana for EUR100 million.
MBE Holding - a joint venture established by Euronext and Borsa Italiana - owns 60.37% of MTS and index provider MTSNext.
Under the terms of the agreement, Nyse Euronext's 51% stake in MBE Holding and 33% stake in MTSNext are valued at EUR100 million.
Borsa Italiana, which is in the process of being acquired by the London Stock Exchange (LSE), exercised an option to buy out Euronext's stake in MBE Holding, which was triggered by the merger of Nyse and Euronext last year.
The transaction is expected to close by mid-September 2007 after which Borsa Italiana becomes the sole shareholder of the company.
"With this acquisition, Borsa Italiana aims to increase its presence in wholesale bond trading and to enhance the value of MTS' business," says the Italian market operator in statement.
News of the sale follows earlier reports that London-based interdealer broker Icap was looking to buy the electronic MTS platform from LSE and Borsa Italiana and had appointed Lexicon Partners to advise it on a bid.
Icap's chief executive, Michael Spencer, told Financial Times reporters that Icap was far better equipped than the LSE to run the bond platform because it already had extensive similar, global electronic operations.
He also argued that an acquisition of MTS by Icap would "bring about the globalisation of the eurozone government bond market for the first time ever".
However the LSE is thought to have no plans to sell the bond trading platform, as one of its primary reasons for pursuing a merger with Borsa Italiana is to create a more diversified business and shift away from reliance on equity trading.