Written By The financial world was rocked on April 6th when Euronext announced plans to acquire Allfunds, one of the largest asset managers in Europe. Valued at €5.5 billion, this offer includes all outstanding shares in Allfunds Group, and is set to create a powerful transatlantic company with operations spanning Europe and the United States. But what does this mean for investors? In this blog post, we’ll break down what you need to know about Euronext’s bid for Allfunds: from the motivations behind it to the potential effects on businesses and individual investors. Read on to learn more about this major deal and its implications.
What is Euronext?
Euronext is a leading pan-European exchange in the Eurozone, with 1,300 listed companies and a market capitalization of €3.4 trillion. The company offers trading in a wide range of securities, including equities, bonds, derivatives, and commodities.
Euronext has been expanding its reach in recent years through acquisitions and partnerships. In 2017, the company acquired the Irish Stock Exchange (ISE) and became the first international stock exchange to list an ETF (exchange-traded fund). In 2018, Euronext announced a partnership with Allfunds Bank, one of the largest asset managers in Europe.
The €.bn bid by Euronext to acquire Allfunds is part of the company’s strategy to become a one-stop shop for European investors. If successful, the acquisition would give Euronext a significant presence in the asset management industry.
Euronext has put forward a €.bn offer to acquire Allfunds, a leading provider of investment services in Europe. The offer values Allfunds at €2.4 billion and represents a premium of 22% over its last closing price.
The acquisition would be financed through a mix of debt and equity, with Euronext committing to raise up to €1 billion in new equity from shareholders. The deal is subject to regulatory approvals and is expected to close in Q4 2019/Q1 2020.
What Would the Acquisition Mean for Euronext?
The acquisition of Allfunds by Euronext would mean a number of things for the European exchange. First and foremost, it would give Euronext a much needed boost in the asset management sector. The combination of the two companies would create a one-stop-shop for asset management, from fund distribution to custody and administration. This would be a major boon for Euronext, as it would make them a much more attractive option for asset managers looking to do business in Europe. Additionally, the acquisition would also give Euronext a significant presence in Spain and Italy, two countries where it currently has little to no footprint.
What is Allfunds?
Allfunds is a global provider of fund investment services. It offers access to more than 60,000 funds from over 2,000 fund managers across the world. Allfunds was founded in 2001 and is headquartered in Madrid, Spain.
Euronext has announced a €6.4bn bid to acquire Allfunds, a leading provider of fund investment services. If successful, the acquisition would create a new powerhouse in the European asset management industry.
So what exactly is Allfunds and what does it do? Here’s everything you need to know:
What is Allfunds?
Allfunds is a global provider of fund investment services. It offers access to more than 60,000 funds from over 2,000 fund managers across the world. Allfunds was founded in 2001 and is headquartered in Madrid, Spain.
The company provides three main services: an online platform for fund managers and distributors; custody and administration services; and data and analytics products. Its platform enables customers to manage their portfolios, conduct due diligence on funds, place orders and track performance. The company also provides custody and administrative services to help customers with back-office functions such as compliance monitoring, tax reporting and accounting. Finally, its data and analytics products provide insights into global fund markets and trends.
What Would the Acquisition Mean for Allfunds?
The acquisition of Allfunds by Euronext would create the largest asset servicing platform in Europe with over €1.6 trillion in assets under administration. The combined company would have a strong presence across Europe, the Americas, and Asia-Pacific with over 1,500 employees in 15 countries.
The acquisition would allow Euronext to offer a broader range of products and services to its clients including fund distribution, custody, and administration. Allfunds’ technology platform is also highly complementary to Euronext’s own trading and post-trade platforms.
The transaction is expected to be immediately accretive to earnings per share and free cash flow. It is also expected to generate significant cost synergies of around €80 million within three years.
How Would the Acquisition be Financed?
Euronext has announced a €.bn bid to acquire Allfunds, a leading provider of fund distribution services. If the acquisition is successful, it would be financed through a mix of debt and equity.
The acquisition would be financed through a mix of debt and equity. Euronext would issue new shares to raise approximately €.bn in equity. The balance of the purchase price would be funded through debt financing, which would include a €.bn rights issue to existing shareholders and €.bn in new debt.
The acquisition is expected to be accretive to earnings per share from the first full year after completion and to generate cost synergies of around €30 million annually from the third full year after completion.
What are the Risks and Challenges Associated with the Acquisition?
There are a number of risks and challenges associated with the acquisition of Allfunds by Euronext. Firstly, it is unclear whether the deal will be able to obtain regulatory approval from the European Commission. Secondly, there is a risk that the deal could face opposition from shareholders in both companies. Finally, it is possible that the acquisition could lead to job losses and/or office closures as part of cost-saving measures.
Conclusion
The proposed acquisition of Allfunds by Euronext is a major development in the European asset management industry. It brings together two leading players in their respective markets, creating a powerhouse for ETFs, mutual funds, and other financial services. The potential implications are extensive – from increased transparency to more competitive pricing – but only time will tell how this merger will affect the market as a whole. Regardless, it’s clear that Euronext has made an ambitious move with this $5.5 billion bid and we’ll be sure to monitor any developments closely as they unfold.
