Deutsche Börse acquires 48.8% of Clearstream from UBS for $427 million

Rick Steves

Clearstream was founded as “Cedel” (Centrale de Livraison de Valeurs Mobilières) in September 1970 by 66 of the world’s major financial institutions as a clearing organization to minimize risk in the settlement of cross-border securities trading, particularly in the growing Eurobond market.

UBS has agreed to sell its remaining minority stake of 48.8% in Clearstream Fund Centre (CFC) to Deutsche Börse AG for approximately CHF 390 million ($427 million).

The transaction, which follows the transition of UBS Fondcenter to Deutsche Börse in September 2020, is expected to complete in June 2021.

UBS expects to recognize a post-tax gain of approximately USD 35 million and CET1 capital increase of approximately USD 400 million in the second quarter of 2021. Clearstream will still provide services to UBS, including the collaboration in jointly servicing banks and insurance companies.

Suni Harford, President of UBS Asset Management, commented: “With the transition now complete, and the business on a strong growth trajectory, our clients are in good hands and Clearstream Fund Centre is well placed for the future. We look forward to leveraging the platform’s leading capabilities and wish the team every success on the next stage of their journey.”

Stephan Leithner, Member of the Executive Board of Deutsche Börse AG and Clearstream Chairman, said: “Clearstream Fund Centre has proved to be a highly complementary business for Clearstream’s fund operations businesses. Our two-step integration approach with UBS has enabled a seamless transition for clients and laid the perfect basis for our continued, long-term partnership with UBS. We see significant opportunities to further grow the global footprint of this business, particularly in Europe but also in Asia Pacific. This transaction is fully in line with our strategy to grow our offering in areas that are benefitting from strong secular growth.”

Clearstream is a post-trade services provider now fully owned by Deutsche Börse AG. It provides settlement and custody as well as other related services for securities across all asset classes. It is one of two European International central securities depositories.

Clearstream operates securities settlement systems based in both Luxembourg and Germany, which allow for the holding and transfer of securities. Clearstream operates its International Central Securities Depository (ICSD) from Luxembourg. It is also a joint partner in the Luxembourgish Central Securities Depository (CSD), LuxCSD, together with the Central Bank of Luxembourg.

In Germany, Clearstream operates the German CSD, Clearstream Banking AG. Clearstream has links to over 50 domestic markets worldwide, and also issues and safe keeps Eurobonds.

The firm provides post-trade infrastructure and securities services for the international market and 58 domestic markets worldwide, with customers in 110 countries.

Clearstream was founded as “Cedel” (Centrale de Livraison de Valeurs Mobilières) in September 1970 by 66 of the world’s major financial institutions as a clearing organization to minimize risk in the settlement of cross-border securities trading, particularly in the growing Eurobond market.

The firm rebranded to Clearstream in January 2000 through the merger of Cedel International and Deutsche Börse Clearing. Clearstream has operational centers in Cork, Luxembourg, Prague, and Singapore. It also maintains representative offices in London, Hong Kong, Tokyo, Dubai, New York, and Zurich.

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