According to Euronext, it is not easy to push forward stock market mergers to deepen the EU capital market

By Huw Jones

LONDON (Reuters) – The “gap” between policymakers seeking stock market mergers to deepen EU capital markets and the demands of private shareholders is making consolidation difficult to push through, Euronext said on Thursday.

Euro zone finance ministers want Brussels to assess and potentially address barriers to stock market mergers in a region with a multitude of trading platforms, according to a draft document on Thursday.

“We welcome any initiative that promotes the consolidation of market infrastructure in Europe,” Euronext CEO Stephane Boujnah told Reuters.

Euronext is celebrating 10 years as a listed company, the result of numerous stock market takeovers, but Boujnah said there are currently “not many willing sellers” in the industry and that Euronext is not a buyer at any price.

“In due course, a gap must be bridged between the vision of policymakers we share that consolidation makes Europe more relevant and the reality of ownership, strategy and platforms that create different dynamics,” he added.

Euronext's “very preliminary” dialogue with Deutsche Börse about a shared liquidity pool in equities was paused for “very fundamental capital market reasons” and not because of regulatory issues that needed to be resolved, Boujnah said.

Boujnah suggested better channeling savings to EU companies and moving “swiftly” towards a unified EU oversight of markets to end different national interpretations of EU rules that create obstacles.

The finance ministers are thinking about both.

An offering prospectus that can be used across borders would also help, he said, adding he was “optimistic” about Euronext’s IPO pipeline.

“If you vaccinate your dog and cross the border with a pet, you have a single vaccination certificate throughout Europe, but if you want to do an IPO, you don’t have a single vaccination certificate,” Boujnah said.

Euronext reported full-year 2023 results on Thursday and said it had made good progress in integrating the Milan Stock Exchange it bought in 2021, with “run-rate synergies” of 74 million euros ($79.62 million ) and thus above the target of 70 million euros.

The story goes on

Full-year sales and profit rose 3.9% to 1.47 billion euros, and the recommended dividend of half of reported net profit, or 2.48 euros per share, is 11.7% higher than in 2022.

Euronext expects underlying costs, excluding depreciation and amortization, of around 625 million euros for 2024.

($1 = 0.9295 euros)

(Reporting by Huw Jones; Editing by David Evans)