MADRID (Reuters) - Spain’s government has authorized a bid by Swiss exchange SIX to buy the Madrid stock market operator BME (BME.MC), the Spanish Economy Ministry said in statement on Tuesday.
Spanish stock market regulator CNMV will now be asked to approve the proposed acquisition before BME shareholders are given the final say on the bid, the ministry said.
A CNMV spokesman said its authorization would be a technicality and the next deadline in the proceedings would be agreed together with SIX. CNMV recommended last week that the government approve the bid.
Progress towards a deal is being closely monitored by BME’s European rivals as its industry struggles with lower fees and revenues. France’s Euronext (ENX.PA), also expressed interest in buying BME but never submitted a formal bid.
Buying BME would give SIX a base inside the European Union, and potentially help Switzerland regain access to EU equity markets after Brussels blocked EU-based investors from trading on Swiss exchanges from July in a row over a treaty.
“We are very pleased with the decision by the Spanish government,” a SIX spokesman said. “This is a major milestone for us.”
SIX’s all-cash 2.84 billion euro ($3.1 billion) offer for BME included a 34% premium over the Spanish bourse’s market price when it made its friendly approach in November.
BME said at the time the offer would “reasonably reflect the current value” of the exchange.
SIX has made commitments that will allow “the continuity of the Spanish stock market as a financing mechanism of our companies”, the Spanish government said without giving details.
In November, SIX’S CEO Jos Dijsselhof said the bid was aimed at creating growth opportunities in both countries rather than focusing on cost-cutting measures and that SIX’s initial intention was not to delist BME.
Reporting by Jesús Aguado; Additional reporting by Oliver Hirt in Zurich; Editing by Isla Binnie and David Clarke