Euronext looks to snap up assets from any Deutsche Boerse-LSE fallout

By Sophie Sassard, Freya Berry and Alexandre Boksenbaum-Granier

LONDON/PARIS (Reuters) - European stock exchange operator Euronext NV (ENX.PA) is considering acquisitions to help it stay competitive after Deutsche Boerse AG (DB1Gn.DE) and London Stock Exchange Group Plc (LSE.L) agreed to merge in a $30 billion deal, according to people familiar with the matter.

With a market value of about 2.6 billion euros, Euronext, which runs stock exchanges in Paris, Amsterdam, Brussels, London and Lisbon, will be reduced to minnow status among European bourses if the LSE-Deutsche Boerse deal goes ahead.

So it is looking at ways to bolster its size and may snap up assets LSE or Deutsche Boerse are forced to sell off to satisfy antitrust regulators vetting their proposed deal, according to sources familiar with the matter.

BNP Paribas SA (BNPP.PA) and Rothschild have been hired to advise Euronext on its next move, according these sources.

BNP Paribas and Rothschild declined to comment.

"The game changed as LSE and Deutsche Boerse decided to merge. Euronext excludes no options now and is studying various opportunities," one source at Euronext said.

Euronext declined to comment, but said it would provide a full overview of its strategic plan on May 16, as previously announced during full-year results.

TARGETED ASSETS

LSE and Deutsche Boerse said on Wednesday, when they unveiled the terms of their merger, that they were confident the deal would be approved by regulators without having to sell off assets.

However lawyers and analysts have said LSE may have to sell down its 57 percent stake in LCH.Clearnet, a major clearing house for derivative and bond trades, to assure regulators the combined group does not have too large a share of the European clearing market. Deutsche Boerse owns Clearstream, one of Europe's biggest settlement houses.

Two sources said Euronext is now eyeing LCH.Clearnet, which was formed in 2003 when the London Clearing House merged with Paris-based Clearnet.

Euronext could also be interested in making a play for LSE-owned Borsa Italiana in Milan, one source said, to add to its suite of European stock trading houses.

London Stock Exchange declined to comment.

Euronext was bought by New York Stock Exchange in 2007, before Intercontinental Exchange Inc (ICE.N) took over the two exchanges. ICE then spun off Euronext as a standalone business in 2014.

The exchange industry has been trying to consolidate for years amid weaker trading volumes and shrinking margins. Instead of stock trading, the exchanges have focused on more profitable businesses, such as derivatives trading and selling market data.

But regulatory concerns about the concentration of power in the hands of a few exchanges, along with nationalist wrangling, have hindered many cross-border deals.

Euronext's stock has risen about 3.5 percent since LSE and Deutsche Boerse first said they were in merger talks on Feb. 23.

(Writing by Noor Zainab Hussain in Bengaluru; editing by Rachel Armstrong, Janet McBride and Peter Graff)