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Cboe Global (CBOE) Set to Acquire Clearing House EuroCCP

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Cboe Global Markets, Inc. CBOE has inked a deal to purchase the remaining 80% stake in leading pan-European equities clearing house, EuroCCP. The transaction is expected to be completed in the first half of 2020, subject to regulatory approvals and clearances. The deal will be funded by cash.

EuroCCP, headquartered in Amsterdam, caters to clearing members and offers them easy entry and netting opportunities in Europe. It was formed in 2013 to provide efficient equities clearing and settlement services throughout the region.

It clears equities from 18 European markets and from the United States, Depositary Receipts along with ETFs and Currency ETCs. Its business objective is to expand netting opportunities for market participants through clearing for stock exchanges, multilateral trading facilities and trade sources. These services aid lower risks.

The buyout is expected to widen the scope of EuroCCP’s open access model and allow Cboe to leverage on its pan-European customer base. Cboe already owns 20% of EuroCCP. On average, EuroCCP clears 4 to 5 million trades daily for 39 trading venues, representing almost 95% of the European equities market. With this transaction, Cboe plans to further grow this business by capitalizing on the strength of its pan-European network. The deal is set to provide Cboe with opportunities in clearing and equity derivatives trading.

The acquisition will boost Cboe’s growth and help the latter to use the newly acquired assets to help it build new equity derivatives trading and clearing capabilities in the region.

Shares of the Zacks Rank #3 (Hold) company have outperformed the industry quarter to date. The stock has gained 0.7% compared with the industry’s increase of 0.2%.

Stocks to Consider

Some better-ranked stocks from the same space are Global Payments Incorporation (GPN - Free Report) , QIWI PLC QIWI and Cardtronics PLC CATM, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Global Payments provides payment technology and software solutions for card, electronic, check, and digital-based payments. The company beat the Zacks Consensus Estimate in the trailing four quarters, the average being 2.42%.

Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. Its average four-quarter positive surprise is 28.80%.

Qiwi operates electronic online payment systems through Payment Services, Consumer Financial Services, Small and Medium Enterprises and Rocketbank segments. The company beat earnings estimates in three of the last four reported quarters, the average being 72.30%.

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