German stock exchange operator Deutsche Boerse AG is in advanced talks to buy FXall, a foreign exchange electronic trading platform owned by data provider Refinitiv, for about US$3.5 billion, people familiar with the matter said on Wednesday.
The deal would further diversify Deutsche Boerse’s business beyond stock trading, while enabling Refinitiv to trim its debt pile following its acquisition last year by a consortium led by Blackstone Group LP in a US$20-billion leveraged buyout.
If the negotiations conclude successfully, a deal could be announced as early as next week, the sources said, asking not to be identified because the matter is confidential.
Deutsche Borse declined to comment, while Refinitiv did not immediately respond to a request for comment.
FXall has more than 2,300 institutional clients who are trading foreign exchange on its platform, offering more than 500 different currency pairs through methods including on-the-spot trading, forward and option contracts, according to its website.
Deutsche Borse, operator of the Frankfurt Stock Exchange, has been seeking new avenues for growth, as the profitability of facilitating trades is eroded by new digital rivals and the rise of passive investment funds that track indices.
On Tuesday, Deutsche Borse announced it would buy risk management software provider Axioma for US$850 million, with plans to merge it with its existing index business to create a new analytics firm.
Deutsche Boerse’s Global Head of FX, Carlo Koelzer, was quoted by the Handelsblatt business daily on April 1 saying that the firm would be interested in buying FXall, should it ever come up for sale.
Blackstone acquired a 55 percent stake in Refinitiv last year from information provider Thomson Reuters Corp, the parent of Reuters News.
Thomson Reuters retains a 45 percent stake in Refinitiv, which provides financial information, security pricing, analytics, risk management and compliance support tools. Refinitiv took on US$13.5 billion in debt as part of its leveraged buyout, according to Moody’s Investors Service Inc.
Update: Thomson Reuters is controlled by Canada’s Thomson family.
Canada Pension Plan Investment Board and Singapore sovereign wealth fund GIC invested in the 2018 deal alongside Blackstone.
(Reporting by David French in New York and Andreas Framke and Arno Schuetze in Frankfurt; Editing by Nick Zieminski)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)