Processes for the acquisition of the Hellenic Financial Markets Group by Euronext, the largest stock market operator in Europe, are entering the final stretch and if they come to fruition, Athens will become the 8th member of this entity.

This is an agreement that, if successful, would offer the Greek capital market access to a European ecosystem with more than 1,800 listed companies and a total market value of more than €6 trillion. More specifically, and to put the numbers into perspective, the Athens Exchange would join a network that is a European leader in terms of liquidity, managing a quarter of the trading activity on the Old Continent, with over 1,800 companies with a cumulative valuation of at least €6.3 trillion.

It will also make Athens Exchange more attractive to foreign funds, who will have it more on their “radar” as part of a group with credibility and name recognition in the markets, rather than as an individual entity. And that group is made up of France, Italy, Portugal, the Netherlands, Norway, Belgium and Ireland, countries that operate brokerages that raise the prestige of Greece. Sources said that a possible acquisition or partnership with the Hellenic Financial Services Authority would be beneficial for the development of the Greek economy, with multiple benefits for businesses, investors and regulators.

The pending deal has the “blessings” of the government, which believes that entering a unified network of stock exchanges would have multiplier benefits for the domestic market, with the aim of further upgrading it. Moreover, the integration of Athens Exchange into the network will reduce the cost of entry of Greek companies into the unified exchange. According to reports, barring any unforeseen events, the negotiations between the two sides are expected to result in a public proposal.

The Greek economy

Athens Exchange has been a takeover target before, with Euronext making two other attempts to approach, without success. At the same time, interest had been shown by the Swiss and Israeli stock exchanges. However, in this case with Euronext, the ground is now more fertile than ever before.

The emergence of Euronext as an investor means that Greece’s economic status has been dramatically enhanced, with the body seeing scope for further growth. That is why it has made the move. The universal performance of the investment grade rating contributed greatly to this development and served as an omen of a big move at the stock market level as well. The fact that growth in Greece has consistently exceeded the eurozone average over the last four years (i.e. from 2021 onwards) has also not gone unnoticed.

Euronext‘s interest reflects its confidence in the positive long-term outlook for the Greek economy and the prospects offered by the deeper integration of the Greek capital market into a broader pan-European context. “A possible cooperation with Athens Exchange would strengthen Euronext’s strategy for the integration of European capital markets, offering opportunities for growth and synergy,” the leading pan-European stock market operator said in the statement.

As the leader of pan-European stock markets, Euronext is becoming a key driver of the ‘Savings and Investment Union’ (SIU), an ambitious project to build a strong single capital market in Europe capable of competing with the US and Asian markets. In this context, the prospect of a strategic partnership with the Athens Stock Exchange (AXAE) is part of Euronext’s overall strategy to integrate European markets and create a common, technologically integrated financial platform.

The “Innovate for Growth” project

With already seven fully integrated markets – Amsterdam, Paris, Milan, Lisbon, Lisbon, Brussels, Dublin and Oslo – Euronext manages almost 25% of all equity trading in Europe, making it the largest liquidity hub for companies and investors.

The strategic plan “Innovate for Growth 2027” implemented by Euronext and its strong institutional shareholders – among them Caisse des Dépôts (France), CDP Equity (Italy), Euroclear, BNP Paribas – focuses on deepening technological integration, upgrading the post-trade arm (clearing and settlement), and enhancing the ability of companies to raise capital across borders.

At the helm of Euronext is Stéphane Boujnah, a charismatic French technocrat and banker, who has been leading the company from acquisition to acquisition since 2015 – culminating in the acquisition of Borsa Italiana from London in 2021. His vision? To create a European capital superstructure that is technologically independent, competitive and perfectly aligned with the needs of the European economy.

The quantitative elements of the deal

Finally, on a technical level, the consolidated group can leverage the common technological infrastructure for trading and post-trading services and operate in the context of cross-border clearing. It becomes an ideal partner for enhancing the international attractiveness and development of the Greek stock market, while offering operational synergies and increased competitiveness.

The task of achieving the deal is made easier by the fact that Euronext values AXAE at 6.9 euros, a 14.4% premium to the current price (6.03 euros) of the group’s share, whose capitalization is estimated at 364 million euros, 35 million euros below the amount (399 million euros) given by Euronext. On a shareholder level, EFAE has not seen the price offered for the takeover for 9 years, namely since 25 July 2014. In case of “white smoke”, 21.029 shares of EFAE will be exchanged for every one new Euronext share, considering that the latter is trading just above 145.1 euros.