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Deutsche Börse Bids €5.3bn for Allfunds in Fintech Push

Frankfurt, Germany - In a bold move to expand its fintech capabilities, Deutsche Börse AG has made a €5.3 billion bid to acquire Allfunds, one of Europe's largest B2B wealth management platforms.

The proposed transaction, if successful, would represent a significant strategic shift for the German exchange operator as it seeks to diversify beyond its core trading and clearing businesses. Allfunds, headquartered in Spain, provides investment fund distribution and trading services to over 1,200 financial institutions across 59 countries.

"This deal would accelerate Deutsche Börse's transformation into a leading provider of innovative technology solutions for the asset management industry," said a person familiar with the company's plans, who asked not to be named discussing private negotiations.

The bid represents a premium of roughly 20% to Allfunds' last reported valuation of €4.5 billion, according to the source. Allfunds was taken private in 2020 by Hellman & Friedman and Temasek in a €1.8 billion deal.

The acquisition would mark Deutsche Börse's largest fintech-focused transaction to date, as the company seeks to capitalize on the growing demand for digital wealth management tools. Global assets under management are expected to reach $145 trillion by 2025, presenting a significant growth opportunity.

"Allfunds' advanced fund distribution platform and established client relationships would complement Deutsche Börse's existing post-trade and data services," the source said. "This combination could create a powerful one-stop-shop for asset managers and distributors."

However, the deal faces potential regulatory hurdles. Antitrust authorities may scrutinize the combination, given Allfunds' dominant position in the European fund distribution market. Industry observers also note that Deutsche Börse's previous attempts to diversify, such as its failed merger with the London Stock Exchange in 2017, have faced intense political opposition.

"Deutsche Börse is clearly making a bold bet on the future of wealth management," said Mark Johnson, a senior analyst at XYZ Research. "But they'll need to navigate a complex regulatory landscape and convince shareholders that this transformation is the right strategic path forward."