LSE agrees to sell Borsa Italiana to Euronext for $5 billion

London Stock Exchange. /Reuters

London Stock Exchange (LSE) said on Friday it had accepted a 4.33 billion euro ($5.09 billion) cash offer by pan-European bourse operator Euronext about the sale of Borsa Italiana.

LSE is selling Borsa as part of regulatory remedies to see through its $27 billion purchase of data provider Refinitiv, which is 45 percent owned by Thomson Reuters, the parent company of Reuters News.

The sale is contingent on the European Commission formally stating it will only approve the Refinitiv deal if all or part of Borsa Italiana is sold.

"We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU's competition concerns," LSE Chief Executive David Schwimmer said in a statement.

Euronext, which has a market value of around 7 billion euros, will fund the deal through a debt and equity hike as well as existing cash.

"Euronext will significantly diversify its revenue mix and its geographical footprint by welcoming the market infrastructure of Italy, a G7 country and the third-largest economy in Europe," Euronext CEO Stephane Boujnah said in a statement.

(With input from Reuters)