CMA not to refer acquisition by Nasdaq of Cinnober Financial Technology to in-depth investigation

The UK Competition and Markets Authority (CMA) has just provided an update on its investigation of the anticipated acquisition by Nasdaq Technology AB, a wholly-owned subsidiary of Nasdaq Inc (NASDAQ:NDAQ), of Cinnober Financial Technology AB.

In an LSE filing, the CMA says it has decided, on the information currently available to it, not to refer the merger to a Phase 2 investigation under the provisions of the Enterprise Act 2002.

Let’s recall that, in November 2018, the CMA launched an investigation into the planned deal, with the regulator considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.

The deal was initially announced in mid-September 2018. Nasdaq said back then that it had made an USD 190 million all cash recommended public offer to the shareholders and warrant holders of Cinnober, which is a major Swedish financial technology provider to brokers, exchanges and clearinghouses worldwide.

Adena Friedman, President and CEO, Nasdaq commented:

“This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”

Nils-Robert Persson, co-founder and Chairman of the Board of Directors of Cinnober, said

“I see the offer as the next step in Cinnober’s development as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments. I really believe in the strategic logic of combining Cinnober and Nasdaq’s Market Technology business also as it reinforces the strong technology foundation in Sweden. As the largest shareholder of Cinnober, I am supportive of the offer and intend to accept the offer.”

Nasdaq said it would fund the acquisition with either cash on hand or liquidity available under existing credit facilities, and remains committed to the existing capital deployment priorities, including funding attractive organic investment opportunities, continuing its dividend growth and share repurchase objectives, as well as achieving a “mid-2x’s” gross debt to EBITDA ratio by mid-2019.