LSE last month kicked off a sale process for its controlling stake in the business, hoping to garner European trust-busters’ approval for its US$27 billion ($36.75 billion) deal to buy data provider Refinitiv. The European Commission is concerned the combination could diminish competition in the electronic trading of European government bonds because Refinitiv controls Tradeweb Markets Inc. Being smaller, MTS is the easier sacrifice to get the deal done.
At first glance, it’s a tiny deal — a mere formality in unlocking a much bigger transaction to transform the strategy of the London Stock Exchange Group Plc. But there’s a lot at stake in the UK bourse’s attempt to sell its holding in Italy’s MTS SpA bond-trading platform. The disposal has consequences not just for the LSE’s rival exchanges, but also for Italy and for Europe’s capital markets.
MTS is a critical piece of European bond-market infrastructure with average daily volumes exceeding 100 billion euros ($161.52 billion). Its importance is reinforced by the fact that it's the key venue for trading Italian government debt.
