Acquisition of Turquoise and merger with Baikal:

LSEG, global investment banks to partner in pan-European trading

London Stock Exchange Group plc (LSEG) and Turquoise Trading Limited (Turquoise) announced their agreement to create a new pan-European trading venture through a merger of the businesses of Turquoise and Baikal Global Limited (Baikal).

The new venture, an FSA regulated Multilateral Trading Facility (MTF), will expand LSEG services across Europe in both lit and dark trading, and liquidity aggregation, with the objective of driving European trading volume growth and promoting venue choice. It will benefit from synergies with LSEG infrastructure and the planned migration to MillenniumIT trading technology.

Continuing to trade under the Turquoise name, the merged entity will be 60 per cent owned by LSEG and 40 per cent owned by the existing Turquoise shareholders, who are global investment banking clients of LSEG.

LSEG intends to broaden equity participation in the new venture by selling up to a further nine per cent of the issued share capital to other interested parties. LSEG will retain a majority shareholding in the new venture. As a neutral venue, Turquoise will be open to all market participants active in Europe and will be designed to inspire the confidence of the region’s regulators.

Exchange operated, the new venture will build upon Turquoise’s existing pan-European lit order book and successful dark pool, as well as drawing upon Baikal’s innovative product pipeline.

LSEG will fully fund the cash needs of the new venture within an agreed framework for the first 24 months from completion and intends to bring the business to sustainable profitability. For the year ended 31 December 2008, Turquoise’s losses before tax were £15.7 million and its gross assets at 31 December 2008 were £11.0 million.