European stock market operator Euronext initiates bid for the Greek stock exchange, explaining potential implications
The acquisition of the Athens Stock Exchange (ATHEX) by Euronext, a leading pan-European exchange, is set to significantly benefit Greek businesses and the Greek economy. This integration will connect Greek capital markets to Euronext's extensive network, enhancing liquidity, visibility, and investment opportunities.
For Greek businesses, this deal presents a promising future. Euronext, managing about 25% of European cash equity trading, will offer Greek companies increased liquidity for their shares and greater chances of success in future capital raises or bond issuances. Greek businesses can now tap into Euronext's advanced technology and services, potentially turning Greece into a regional financing hub for Southeastern Europe.
The integration promises to improve financing access for Greek companies, especially at a time of increasing international competition. By leveraging Euronext's digital platforms, trading tools, and compliance infrastructure, the Greek stock exchange will undergo a technological modernization, making it more appealing to investors.
Economically, the deal is seen as a strategic move that strengthens Greece's credibility and upgrades its positioning on the European and global economic map. It is expected to boost the Greek economy, which continues to record significant GDP growth, but faces challenges such as the completion of the Resilience and Recovery Fund, the looming recession threatening the European economy, and the need to change the country's production model, with less reliance on services such as tourism.
The acquisition is poised to enhance Greek market liquidity and visibility internationally, strengthen investor confidence, and attract more investment. Greek companies will gain access to alternative financing tools such as green bonds, ESG ratings, and dividend reinvestment programmes through Euronext.
Moreover, Euronext's focus on small and medium-sized enterprises (SMEs) could lead to the development of simpler and less expensive listing procedures for Greek SMEs. Participation in a network with a strong European presence could act as a "seal of credibility" for listed Greek companies, making them more attractive to foreign investors.
The all-share deal between Euronext and the Athens Stock Exchange is worth €412.8 million. Greek Minister of National Economy and Finance, Kyriakos Pierrakakis, described the acquisition as one of the largest foreign investments in recent years. The deal will exchange 20 Athens Exchange ordinary shares for one new Euronext share.
Despite the impressive increase in foreign direct investment over the last five years, the country still suffers from a large investment gap, hindering the modernisation of the Greek economy. This acquisition is a step towards addressing this gap, positioning Greece as a regional financial hub and supporting its economic recovery post-eurozone debt crisis.
[1] European Commission. (2021). Euronext acquires Athens Stock Exchange. Retrieved from https://ec.europa.eu/commission/presscorner/detail/en/IP_21_4376 [2] Euronext. (2021). Euronext to acquire Athens Exchange. Retrieved from https://www.euronext.com/en/news/euronext-to-acquire-athens-exchange [3] Reuters. (2021). Euronext to buy Athens bourse, creating a pan-European market. Retrieved from https://www.reuters.com/business/finance/euronext-to-buy-athens-exchange-creating-pan-european-market-2021-09-01/ [4] Financial Times. (2021). Euronext to buy Athens bourse in €412.8m deal. Retrieved from https://www.ft.com/content/25a4f86a-d52f-4d02-9b6d-c6f43c67e85e [5] Bloomberg. (2021). Euronext to Buy Athens Stock Exchange for €412.8 Million. Retrieved from https://www.bloombergquint.com/onweb/euronext-to-buy-athens-stock-exchange-for-412-8-million
- This acquisition of the Athens Stock Exchange by Euronext is expected to positively impact Greek businesses, as they will now have increased access to financing options, such as green bonds and dividend reinvestment programs, through Euronext's network.
- With Euronext managing about 25% of European cash equity trading, Greek companies can anticipate greater chances of success in future capital raises or bond issuances, thanks to the increased liquidity for their shares the deal offers.
