Deutsche Börse Pursues New Billion-Euro Deal Following Record Profits

FRANKFURT (dpa-AFX) - After posting record profits in 2025, Deutsche Börse is eyeing its next billion-euro acquisition, even as it faces political headwinds in the United States under President Donald Trump. Germany's largest stock exchange operator announced on Thursday in Frankfurt that it will acquire the remaining shares of data and index provider ISS Stoxx for a total of €1.1 billion, making it the sole owner. The DAX-listed company, which already held 80 percent of ISS Stoxx, is buying the remaining 20 percent from private equity firm General Atlantic. Both the takeover and the financial results released Wednesday evening were well received by the market.

The company's shares, which had been under pressure recently, rose nearly two percent to €207 by midday. This trimmed the stock's losses since the end of 2025 to around seven percent. Deutsche Börse shares have been under pressure since hitting an all-time high of just over €294 in May last year. Following the decline from that peak, the shares are now back at levels seen in autumn 2024. Over the past five years, the stock has gained about 50 percent, lagging the DAX significantly.

Looking at the past decade, however, the shares—which have been publicly traded for 25 years—have risen almost 200 percent, slightly outperforming the DAX. Deutsche Börse is currently valued at just under €39 billion, roughly equivalent to Commerzbank. Both companies thus sit in the middle of the DAX in terms of market capitalization.

ETF Boom Fuels ISS Stoxx Growth

The full acquisition of ISS Stoxx is expected to further accelerate Deutsche Börse's growth, after the company posted its highest-ever profits last year. ISS Stoxx provides stock market indices used by index fund (ETF) providers, as well as analytics and sustainability solutions—a hot topic in financial markets until the political climate, especially in the US, shifted. In addition, proxy advisor ISS issues voting recommendations to major investors for annual general meetings.

With the ETF boom—which has also attracted retail investors through savings plans—ISS Stoxx is a key asset for Deutsche Börse. "Forty-five percent of European ETF growth was based on our STOXX indices," said CEO Stephan Leithner during the annual results presentation in Frankfurt.

Sustainability a Contentious Issue Under Trump

However, ISS Stoxx is facing pressure in the US, where President Trump opposes sustainability and diversity rules (ESG) and views the work of proxy advisors like ISS as ideological interference in American companies. Asset manager JPMorgan recently ended its collaboration with proxy advisors such as ISS, and Texas has enacted legislation against using ESG as a criterion for voting decisions.

CFO Jens Schulte said that political pressure was one reason why the proxy advisory business grew only modestly in 2025. Leithner emphasized that ISS works closely with US authorities and expressed confidence that proxy advisory services will remain important in the long term.

Deutsche Börse had originally considered a stock market flotation for ISS Stoxx, but this plan was dropped with the full acquisition. General Atlantic's exit is expected to take effect by the end of March.

Next Billion-Euro Deal

With the purchase of the remaining ISS Stoxx shares, Deutsche Börse is announcing its second major deal in just a few weeks. In January, the company said it intends to buy the fund platform Allfunds for around €5.3 billion—the largest acquisition in its history. "With the acquisition of Allfunds, we are creating a European investment fund champion," said Leithner.

Deutsche Börse has pursued acquisitions for years to reduce its dependence on stock market volatility. However, hurdles remain for the Allfunds deal: regulatory approvals are still pending, particularly from EU competition authorities. The transaction is not expected to close before 2027.

Until the Allfunds acquisition is finalized, Deutsche Börse's largest purchase remains the €3.9 billion acquisition of Danish software firm Simcorp in 2023. Simcorp's software is designed to help asset managers and financial institutions operate more efficiently.

Dividend Set to Rise

Last year, Deutsche Börse posted record figures, thanks in part to acquisitions. Net profit reached €2.1 billion, up three percent from the previous year. Shareholders are set to benefit after enduring a recent share price slump, as investors fear competition from the artificial intelligence boom. The dividend is slated to rise by 20 cents to €4.20 per share.

The company reaffirmed its outlook for the new year, expecting continued organic growth. "Thanks to strong structural growth, we more than offset headwinds from the interest rate environment, low volatility, and currency effects," commented CEO Stephan Leithner on the results.

Net revenue excluding interest-dependent so-called treasury results climbed nine percent to €5.2 billion. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose three percent to €3.5 billion, while operating profit excluding treasury results jumped 14 percent to €2.7 billion. These figures met analysts' expectations.

Annual Forecast and Medium-Term Goals

The company also confirmed its forecasts for the current year. Net revenue excluding treasury results is expected to rise to €5.7 billion, with corresponding EBITDA reaching €3.1 billion. "The structural growth drivers in our businesses remain fully intact. We are optimistic about the current financial year and expect to achieve our operational targets for 2026," said Leithner.

Leithner, who has led the company for just over a year, unveiled new medium-term targets in December. As costs are not expected to rise as quickly as revenues, the company is targeting average annual operating profit growth of around 12 percent to €3.7 billion by 2028. Revenues excluding treasury results—which mainly include net interest income and fees from pledged collateral—are projected to grow by eight percent per year to €6.5 billion.

In addition to earnings and profit targets, Deutsche Börse announced in December that it would also include share buybacks as a regular part of its capital allocation strategy alongside dividends. The volume and timing of these buybacks will be determined annually, depending on expected excess liquidity. For 2026, a share buyback of €500 million is planned. The payout ratio is to remain at 30 to 40 percent, with the dividend per share set to rise steadily.

Despite high distributions and the acquisitions announced in January and on Thursday, CFO Jens Schulte said the company still has room for further smaller acquisitions. Larger purchases, however, are off the table for now to prevent further increases in debt and to protect the company's strong credit ratings./als/zb/mis