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Minority position in financial services firm sold after 5

years

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Analysts await first fruits from LSEG-Microsoft JV

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Euroclear welcomes TCorp as shareholder, cites shared

vision

(Recasts, adds analyst comment, shares, executive quotes)

By Sinead Cruise and Chandini Monnappa

LONDON, Dec 12 (Reuters) - The London Stock Exchange

Group ( LDNXF ) has sold its 4.92% stake in Belgium-based

financial services provider Euroclear for 455 million euros

($479 million) as it sharpens its focus on product innovation

expected in 2025 by exiting non-core assets.

LSEG sold the stake to TCorp, the financial services partner

to the New South Wales government, it said in a statement,

ending its five-year minority interest after it bought the stake

for 278.5 million euros in 2019.

LSEG did not comment on Thursday on its rationale for

offloading the position.

LSEG Chief Executive David Schwimmer had, however, told

analysts in October the sub-five percent ownership in Euroclear

afforded his firm "no kind of control, no strategic position",

in contrast to the firm's key post-trade asset, LCH, in which it

owns a majority stake.

LSEG shares were broadly unchanged in the wake of the news

on Thursday but have risen 22% so far in 2024, extending last

year's near-30% rally. The FTSE 100 has risen around 7.5% in

2024.

Schwimmer and his executive team have been driving a

multi-year transformation of the former exchange operator into a

global data and market infrastructure powerhouse since its $27

billion acquisition of Refinitiv in 2021, and have joined forces

with Microsoft ( MSFT ) to accelerate its strategy.

LSEG said in August the partnership was "approaching

commercialisation" with the first product set to become more

widely available by year-end.

"Growth is needed from the 10-year partnership with

Microsoft ( MSFT ) for next-gen data and analytics and cloud

infrastructure in the coming years to justify the current

valuation in our view," HSBC analyst Johannes Thorman said in a

note to clients on Dec. 3.

"Although we think the stock is expensive, we maintain Hold

due to strong momentum and potential catalysts," the note added.

Thomson Reuters, the parent company of Reuters, holds a

minority stake in LSEG, which is Reuters' largest news service

client.

ALIGNED

Euroclear CEO Valerie Urbain said TCorp's long-term

investment horizon and focus on the Asia Pacific region aligned

well with Euroclear's strategy of "providing more liquid and

stable markets for Europe and beyond".

Euroclear serves around 2,400 financial institutions with a

range of domestic and cross-border settlement and custody

services across bonds, equities and derivatives.

The group has around 40 trillion euros of assets under

custody and enabled 299 million netted transactions in 2023,

worth around 1 trillion euros, according to company-supplied

data.

"This is another important step in our transition from a

user-owned model to one more oriented towards client centricity

and long-term shareholder value creation," Euroclear Chairman

Francesco Vanni d'Archirafi said in a statement.

($1 = 0.9501 euros)