It was the largest M&A deal in the history of Deutsche Börse: the takeover of Danish specialist software provider Simcorp, valued at €3.9 billion. For this, but above all for the far-reaching transformational consequences of the deal, Deutsche Börse will receive the Corporate Finance Award from Börsen-Zeitung in the Digital category.

Simcorp is much more than an expensive acquisition that accelerates the Group's inorganic growth. The provider of investment management solutions for large insurance companies, asset managers and pension funds is the final piece of the puzzle in the newly created Investment Management Solutions division. The Group is bundling its existing subsidiaries Institutional Shareholder Services (ISS), Stoxx and Axioma in this division.

The Investment Management Solutions division is a core pillar of the new „Horizon 26“ strategy. CEO Theodor Weimer's designated successor Stephan Leithner is responsible for this division, which aims to increase the share of recurring revenues to make Deutsche Börse less dependent on the cyclical trading business. The capital market has now understood the logic behind the Simcorp deal.

But this was not always the case. Investors initially punished Deutsche Börse with share price losses immediately after the announcement of their mega-deal. „We knew that the deal was challenging and also difficult for the market to understand,“ says Leithner in the Börsen-Zeitung Corporate Finance Award podcast. It therefore took Deutsche Börse's annual Capital Markets Day to explain the strategic logic to the market and dispel any doubts about the complex takeover.

„The decisive factor is that the entire organization and the entire Executive Board stood united behind the transaction,“ says Leithner. The customers had been behind the Simcorp transaction from the very beginning anyway and were one of the driving forces behind it. CEO Weimer had already recognized the growing importance of institutional clients for Deutsche Börse at the beginning of his term of office - alongside traditional banks and traders. The search for Simcorp therefore began six or seven years ago.

„It was a series of steps that led us to Simcorp,“ says Leithner, who arranged the deal together with Weimer. The first step was the much smaller takeover of Axioma in 2019. It had already strategically positioned Deutsche Börse differently and today delivers synergies with Simcorp because both companies are complementary along the value chain, explains Leithner.

The purchase of Axioma had another advantage for the stock exchange. As Axioma had already entered into a partnership with Simcorp years ago, Leithner & Co. were familiar with how Simcorp operates and could be sure that the companies' cultures would fit together well. „The culture part is something that is often underestimated in M&A,“ says Leithner, who is experienced in M&A. Looking back, Leithner describes the operational proximity to Simcorp as a great opportunity and one of the success factors for the successful takeover.

The fact that two major transactions took place at the same time was a challenge for the Group. After the acquisition of Axioma, Deutsche Börse merged Axioma with its index business and founded Qontigo. As part of this transaction, the growth investor General Atlantic came on board and invested 720 million dollars in Qontigo. According to Leithner, an important success factor during this time was that Deutsche Börse had a team with a lot of M&A experience.

The crux of the matter, however, was not to be put under pressure due to the long time horizon of the takeover. „You have to keep calm,“ says Leithner. In a situation like this, the organization should not allow itself to be completely gripped by „deal fever“. In view of the long timeline, the relationship of trust with Simcorp was also very important - especially as some of the negotiations took place during the pandemic. Looking back, Leithner therefore describes the entire negotiations as a „big intensive video conference“.