Euronext moves into $5.1 trillion daily FX market with acquisition of FastMatch
23 May 2017 | 6024 views | 0
Euronext is to acquire a 90% stake in spot FX trading network FastMatch for an initial cash consideration of $153 million.
Since it was established in 2012 by Credit Suisse and FXCM, FastMatch has been able to establish a sizeable position in the ECN space, more than doubling its market share and growing Average Daily Volume by 52% in 2016. In Q1 2017, FastMatch’s ADV grew by 61% year-over-year to $17.7 billion ADV in a relatively flat volume environment.
The transaction, which is expected to close in the third quarter, includes a contingent earn-out payment for an additional $10 million and minority rights for the management of FastMatch who will stay invested with a 10% interest in the business. The deal provides a windfall bonanza for FXCM, which will bank approximately $55.6 million for its stake in the business.
Euronext follows other exchange operators such as Bats and Deutsche Bourse in expanding into the $5.1 trillion daily foreign exchange market, traditionally the preserve of the big banks.
“The acquisition of FastMatch breaks new ground for Euronext, through expansion into the FX market which is the world’s largest traded asset class. 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," says Stéphane Boujnah, chairman and CEO of Euronext. "The combination of FastMatch’s in-depth FX expertise, leading technology platform, diverse customer base and entrepreneurial spirit with Euronext’s scale, strength and credibility, will position Euronext as a trustworthy infrastructure provider servicing a market where participants are increasingly looking for transparency, reduced capital costs, cutting-edge trading and long-term clearing solutions."
He says Euronext will bolster FastMatch’s European presence through increased access to institutional clients across Europe. Additionally, the roll-out of real-time and historical data products will be pursued in the short-term. In the mid-term, FastMatch and Euronext will aim to achieve presence in the FX derivatives space.