Pan-European stock market operator Euronext has agreed to buy the Milan bourse from the London Stock Exchange (LSE) for 4.33 billion euros, the companies said Friday.
The LSE said it was considering a sale to meet EU requirements that it divest assets to get approval for its $27 billion purchase of US financial data provider Refinitiv.
Euronext will also acquire the Italian platform MTS which will give it access to the sovereign debt market.
Euronext head Stephane Boujnah said the deal marked a "decisive step" in its strategic plan to create a core of Europe's major capital markets.
Euronext already operates Amsterdam, Brussels, Dublin, Lisbon, Oslo, and Paris.
In a statement, LSE said it expected its sale of Borsa Italiana was, in any case, going to be a condition for the Refinitiv transaction but added that the deal was valid on its own strategic and financial merits.
Additionally, the proceeds will help pay down debt incurred on the Refinitiv acquisition.
LSE chief executive David Schwimmer said, "we are pleased to have reached this important milestone. We believe in the sale. will contribute significantly to addressing the EU's competition concerns."
LSE unveiled plans to buy Refinitiv last year to create a market information giant to rival US giant Bloomberg.
Refinitiv will help the LSE shift from generating revenue solely from securities trading to providing investors information about trading.
In October 2019, the LSE successfully fended off a multi-billion-dollar takeover bid from the Hong Kong Stock Exchange.
The Refinitiv deal came two years after LSE's failed £21 billion mergers with Deutsche Boerse.
The European Commission blocked that proposal -- the third failed attempt at a tie-up between the British and German stock exchange operators -- on competition fears.