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Together with Burgundy, Oslo Børs will offer a competitive and effective alternative in the Nordics. The Nordic owners of the Swedish exchange Burgundy have entered into an agreement for Oslo Børs ASA to take over 100% of the shares in the company.
Increasing competition in securities markets has resulted in a decline in market share for traditional exchanges, as well as generally lower profit margins on securities trading, particularly equities trading. Oslo Børs and Burgundy will together build a platform for growth, and will be a strong and viable competitor both for other Nordic exchanges and for foreign trading platforms that offer trading in Nordic securities.
Burgundy has regulatory approval to operate a regulated market, and a MTF (multilateral trading facility). The company is located in Stockholm. Burgundy offers trading in more than 1,000 listed Swedish, Norwegian, Finnish and Danish shares, in addition to other products such as warrants, ETFs and certificates. Burgundy has 34 investment firms as members, of which 23 are also members of Oslo Børs. Over the last three years, Burgundy has established a growing market share of equities trading in the Nordics. Burgundy’s CEO, Olof Neiglick, will continue as the company's CEO following its acquisition by Oslo Børs.
Together with Oslo Børs, Burgundy will also have greater ability to list and market listed instruments, including ETFs, structured notes and warrants. In addition, Oslo Børs will be able to extend its existing strong position in listing of bonds and equities into the broader Nordic market to an even greater extent.
Oslo Børs is committed to continuing and developing Burgundy’s activities in close collaboration with its current owners, and it also intends to expand Burgundy's product range beyond its current activities. In order to ensure continuity and local expertise in Stockholm, which is the market where Burgundy currently has its strongest position, a new customer-based "advisory board” will be established. Burgundy will work closely with Oslo Børs in its day-to-day operations and production in order that both parties can benefit from lower costs and greater focus that will benefit their competitiveness.
"We greatly appreciate the confidence shown in Oslo Børs by the original owners who took the initiative to establish and develop Burgundy. Oslo Børs welcomes the opportunity to continue Burgundy's development, and we are extremely pleased both that the former owners intend to work with us on this and that Olof Neiglick will continue as Burgundy's CEO. Oslo Børs and Burgundy will work together to continue the development of a strong and effective Nordic platform for both investors and issuers, based on efficient, low-cost operations. The combination of Burgundy’s well-known brand and the international strength of the Oslo Børs brand name will provide a strong foundation for future growth", comments Bente A. Landsnes, President and CEO of Oslo Børs.
“Burgundy has been a key player in educating and transforming Nordic banks way of trading in the post-MIFID landscape. Scale and international distribution will be important ingredients in Burgundy’s future development. The Board has concluded that the best solution is to make this transaction with Oslo Børs who has strategic interest to expanding their business in the Nordics and with whom the shareholders already have an existing long-term relationship”, says Bertil Villard, Chairman of the Board of Burgundy.
Oslo Børs collaborates with the London Stock Exchange, and plans to start using LSE’s Millennium Exchange trading platform in November 2012. In order to facilitate efficient operations and reduce complexity and infrastructure costs for customers, Burgundy now also intends to use Millennium Exchange, which will replace its current Cinnober trading platform. The migration to Millennium Exchange is expected to be carried out during the course of 2013. Burgundy will continue to offer clearing and interoperability with its existing clearing houses EMCF, X-Clear and EuroCCP.
The acquisition of Burgundy is subject to approval by the relevant authorities in Norway and Sweden.
There will be a press briefing with the CEO of Oslo Børs, Bente A. Landsnes, starting at 12.00 on Tuesday, 16 October at Burgundy’s premises in Stockholm, Kungsgatan 12-14. Burgundy’s Chairman of the Board, Mr Bertil Villard,and CEO Olof Neiglick will also be present at the meeting.
