ISE sale won't weaken the exchange - Somers
THE head of Euronext has insisted his stock exchange group is a "different company" to one Deirdre Somers feared being taken over by three years ago.
Then, in an interview with this newspaper, the CEO of the Irish Stock Exchange warned about the damage such deals wreak on local capital market ecosystems.
She pointed to the destruction of regional markets elsewhere in Europe, and insisted that as an independent enterprise, the ISE served the local need for capital better than its peers.
"There is no doubt that more geographically specific, and regional markets have been the loser.
"You talks to people in Brussels, Lisbon, Amsterdam, even France and they would say their ecosystem has been destroyed. Their ability to fund their own enterprise has been compromised," she said.
Yesterday however Ms Somers was keen to distance herself from that stance. The observations were made "a very long time ago" when Euronext operated on a "very different formula" and a "very different ownership" structure.
Her comments were echoed by Stéphane Boujnah, the head of Euronext, the exchanges operator that this week agreed to pay €137m to absorb the Dublin bourse in to its stable of pan-European exchanges.
The deal takes the united group to a six-exchange strong operation with a combined revenue of €416.9m - still considerably smaller than principal rivals, Deutsche Börse AG or the London Stock Exchange Group.
But Mr Boujnah, a former Santander banker, emphasised the tie-up with Dublin would expand the local stock exchange's membership base increase liquidity and "boost the development of new Irish traded" financial products including single stock futures, options, and index derivatives.
He added the merger would also "optimally" equip the enlarged group to "capture the opportunities and optionalities in a post-Brexit environment".
Predictably both CEOs then stressed the exchanges are stronger together.
The ISE's global dominance in debt and exchange-traded funds will benefit Euronext, and conversely Dublin will profit from the additional reach, advanced technological systems and trading capability of the European bourses.
There will be some job losses, Mr Boujnah conceded although he steered clear of specific figures insisting it was impossible to calculate at this juncture, and besides, the centralisation of "core capabilities" may result in job creation.
Above all, he stressed Euronext was now a "different company with different ambitions" referring to its June 2014 spin-out from former parent, Intercontinental Exchange.
That move returned Euronext to the control of its founders, the Paris, Brussels and Amsterdam bourses, along with later addition, Lisbon.
Mr Boujnah stressed the group favours a "balanced federation" that "respects the identity of each participant", words that echo the EU's renewed vows recently as the bloc stares down the barrel of Brexit.
Ms Somers also pledged the ISE's loyalty to a pan-European venture. There was no point in clinging to ideology.
This was a clear-eyed strategic decision, she said.
The problems of the past were just that. "What has struck us is just how passionate and committed [Euronext is] to local ecosystems and the powering of the real economy," she said.
"It's in their DNA," she added.
Time will tell whether that conviction is misplaced.