Nasdaq, the second-largest stock exchange in the world, announced it has agreed to acquire Cinnober, a Swedish financial technology group, providing its services for brokers, exchanges and clearing houses worldwide. Nasdaq made an all-cash 1.7 billion crown ($190 million) bid on Friday and Nils-Robert Persson, the main shareholder and chairman of Cinnober, confirmed his intention to accept it.
The deal is expected to be closed in the fourth quarter and Cinnober shares rose 27 percent following the announcement. Its customers include some of the largest exchanges in the world, such as the Asia Pacific Exchange, Dubai Gold & Commodities Exchange, Euronext, Japan Exchange Group and the London Metal Exchange to name a few.
Nasdaq CEO Adena Friedman said that “The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq. […] This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.“
Cinnober is known for its crypto affiliations as the fintech has partnered BitGo earlier this year to provide a high-performance trading solution for institutional investors. BitGo is one of the leading digital asset custodians, also offering an enterprise-grade BTC wallet. Last week, the company won the approval of South Dakota regulators and is now officially a qualified custodian of virtual currencies for institutional investors.
Mr. Persson has welcomed the acquisition, claiming that, “I see the offer as the next step in Cinnober’s development as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments. I really believe in the strategic logic of combining Cinnober and Nasdaq’s Market Technology business also as it reinforces the strong technology foundation in Sweden.“
Cinnober stakeholders will be hopeful the acquisition will be a breath of fresh air, as the company has been struggling in the last couple of years. The company has lost some of its key clients and failed to maintain profitability after changing its payment plans.
The shares have fallen by over 40 percent in the last year and Cinnober recorded an operating loss of $11.5 million. Chief executive Veronica Augustsson was replaced by Peter Lenardos, a former Bank of Canada managing director, to help remedy the situation and with the guidance of Nasdaq, the company looks to be on the way up.
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