German stock exchange operator Deutsche Börse has bid $5.5bn to acquire investment funds platform Allfunds in a move that could have ramifications for Europe's asset and wealth management market.
Deutsche Börse has confirmed that it has entered exclusive discuissions with Allfunds and has stated that the Allfunds board has agreed to enter into an exclusivity period based on the current proposal.
While a binding offer has not yet been made, the proposed terms would value Allfunds stock at €8.80 per share with €4.30 in cash, €4.30 in newly issued Deutsche Börse shares and €0.20 per share in dividends for 2025.
Allfunds currently has €1.7trn in assets under administration on its platform and a 30% share of Europe's cross-border funds distribution market.
Deutsche Börse also has its own fund services business, Vestima, as well as a post-trade business, Clearstream.
According to Deutsche Börse, the acquisition would help reduce fragmentation in Europe's investment market. It would also help to promote more involvement from retail investors, both stated goals from the EU in its ambition to promtoe the trading bloc as an investment funds centre.
“Deutsche Börse Group is a strong advocate of a prospering funds industry being essential to the EU’s status as a globally relevant financial center," stated the exchange group.
"The proposed transaction would be in line with Deutsche Börse’s strategy and further emphasizes its ongoing commitment and efforts to strengthen European capital markets and its global competitiveness as envisioned by the Savings and Investments Union (SIU).”
It is not the first time an exchange group has recognised the potential value in acquiring Allfunds. In 2023, Euronext also made a €5.5bn offer for the funds platform before later dropping its bid.