News and Deals
News and Deals
Linklaters has advised 13 leading, global banks on the partial sell-down of their revenue surplus share in SwapClear for a total cash consideration of £1.15 billion and the investment by a consortium of 11 of those banks in a 20% stake in Post Trade Solutions, a division of the London Stock Exchange Group which provides risk management and optimisation services to the uncleared derivatives market, for aggregate cash consideration of £170 million.
LSEG will acquire an increased proportion of the revenue surplus from the SwapClear business currently held by the bank group. Previously, the bank group were entitled to c.30% of SwapClear’s revenue surplus through to 2035. As a result of this transaction, the revenue surplus share for the SwapClear banks will reduce to 15% for 2025 (applied retroactively to 1 January 2025) and 10% from 2026. LSEG will pay an aggregate cash consideration of £1.15 billion for this change in terms, payable in two instalments in 2025 and 2026. A further payment of a maximum of £200 million will be payable should certain future growth targets be met.
The consortium investing in Post Trade Solutions have reaffirmed their commitment to the ongoing successful partnership in SwapClear through an extension of the revenue surplus share at the 10% level from 2035 until 2045.
This transaction represents a technology-led collaboration between key market participants to bring material efficiencies across capital, risk and operations to the bilateral OTC derivatives market.
The consortium are major customers of LSEG’s clearing services and Post Trade Solutions business. As a result, this initiative continues the strong history of strategic partnership with LSEG and market participants, replicating the original LCH model that continues to prove so successful for LCH and its customers.
As shareholders in Post Trade Solutions, the consortium will benefit from strategic input into Post Trade Solutions and its future growth. Three directors nominated by the consortium will join the Board of Post Trade Solutions.
The cross-practice Linklaters team was led by Financial Regulatory Partner Michael Kent and Corporate Partner Sushil Jacob. They were supported by Corporate Managing Associates Matthew Halliday and Graeme Finnie and Financial Regulatory Managing Associate Pan Papakyprianou. Linklaters also gave the consortium specialist advice in relation to US, UK and European regulatory and antitrust issues.
LSEG’s announcement of the transaction can be found here: LSEG announces partnership and investment in Post Trade Solutions | LSEG