Deutsche Boerse to acquire 80% stake in ISS

BERLIN: The German stock exchange operator Deutsche Boerse said it would acquire an 80% stake in Institutional Shareholder Services (ISS) for about $1.8 billion, the latest in a flurry of deals to sweep across the exchange industry.

It makes good on a promise by Deutsche Boerse Chief Executive Officer Theodor Weimer to grow through acquisitions ater his bid to acquire the Milan stock exchange failed over the summer.

The deal also marks the latest example of an exchange bulking up its offerings by joining forces with a provider of data and analytics.

The purchase by Deutsche Boerse of the majority stake values ISS at $2.3 billion. The corporate governance adviser’s current management and Genstar Capital will retain a stake of 20% in the business, the parties to the deal said in a statement.

It is the largest deal during Weimer’s tenure of nearly three years at the helm of Deutsche Boerse. He is due to present his new medium-term strategy to investors on Wednesday and has said that mergers and acquisitions would play a big role in the company’s future.

The stock exchange operator will take on an additional 1 billion euros ($1.2 billion) in debt to help fund the agreed deal, which it expects to close in the first half of 2021 subject to regulatory approvals.

The transaction was announced amid active deal making by stock exchanges as they seek to leverage their electronic trading platforms with analytics, in a redrawing of the market landscape that has also drawn the atention of regulators.