Borsa Italiana – London Stock ExchangeMedia Presentation

25 June 2007

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Two Highly Efficient and Complementary Businesses –Europe’s Leading Diversified Exchange Group

• Europe’s leading business in listing and trading of equities

• Europe’s leading business in trading of ETFs, securitised derivatives and fixed income products

• Primary European and global listings venue

• Broadly diversified product offering with strong and growing presence in derivatives and information products

• World leader in exchange technology

• Most efficient provider of post-trade services in Europe

• Unique global strategic position

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Merger Highlights

• 4.90 LSE Group shares for each Borsa Italiana share

• Values Borsa Italiana at £1,103m (€1,634m) and combined group at £3,900m (€5,777m) (1)

• LSE shareholders will own approximately 72% and Borsa Italiana Shareholders approximately 28%(1)

• Cost synergies of at least £20m (€29m) in FY 2010; Revenue synergies of £20m (€29m) in FY 2011

• Expected to be earnings neutral to positive in FY 2008 and accretive by at least10 per cent. in FY 2009

(1) Based on closing price of 1,387p, £/€ exchange rate of 1.4815 as of 19 June 2007 and assuming full acceptance of share offer by Borsa Italiana shareholders.

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Bringing together two highly complementary businesses

London Stock ExchangeBorsa Italiana

• Premier global exchange brand delivering vision to be world’s capital market

• Leading global market for UK and international equities

• International listings venue of choice

• Leading global growth market

• State-of-the-art cash trading technology driving structural change and fastest growth in order book of all major listed equity and derivatives exchanges in Europe and US in 2006

• Distinctive and most efficient vertically organised open model

• Highly liquid equity market with significant retail participation

• Broad product offering with leading position in ETFs, securitised derivatives and wholesale bonds

• Leading European fixed income trading platform

• Most efficient post-trading infrastructure in Europe

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Poised for additional growth

Cross market access and selling

Complementary investor bases and expertise

State of the art technology

– Single cash trading platform with cross-market access– Leveraging AIM to accelerate the SME marketplace in Italy– A new force in the European fixed income market– Extension of efficient and low-cost post-trade services– Innovation and cross-selling of derivatives products

– Potential to unlock retail participation in the UK, building on the success of the Italian market in cash equities, ETFs and securitised derivatives

– Potential to leverage LSE’s expertise with institutional investors (e.g. algorithmic traders)

– World leading next generation technology (TradElect) offered to customers in both markets

– Facilitates further structural shift in cash trading

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Leading Market Positions• #1 in Europe by number of listed companies – 3,540 as at May 2007

• #1 globally by number of new issues – over 620 in 2006

• #1 in Europe by market capitalisation – 48% of FTSEurofirst 100

• #1 in Europe by value and number of order book trades

• #1 in Europe in wholesale electronic bond trading

• #1 in Europe for electronic trading of ETFs and securitised derivatives

Underpinned by:

• Advanced technology platform

• Efficient post-trade services

Strategic Rationale

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Strategic Rationale

Benefits for Customers and other Stakeholders• Continues to lower the all-in costs of trading and shares the benefits of increased scale with

customers

• State of the art IT infrastructure, leveraging expertise from all parties

• Functional integration of the two equity markets with domestic regulatory oversight,thus maximising opportunities and minimising complexity

• Broadens product and service offering reducing operational costs and risks to customers– New fixed income products through MTS platform

– Pan European equity derivatives

– European post-trade services via CC&G and Monte Titoli

• Reduces cost of capital for issuers as liquidity pool expands

• Competitive post-trade services in the new open access and interoperable environment

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Business Profile – London Stock Exchange

Business DescriptionIssuer• 1,608 Main Market and 1,637 AIM companies at 31

March 2007• £53.7bn money raised, up 57% on prior year• 503 new issues in FY 2007 across all marketsBroker• 353,000 average daily SETS bargains, up 58% on prior

year• SETS value traded up 37% at £1.6tn (FY 2006: £1.2tn)• SETSmm average daily bargains doubled to 80,000 in

FY 2007Information• 116,000 data terminals at 31 March, including 96,000

professional users• Proquote terminals at 3,700, including 1,000 international

screens

Segmental Analysis

FY 2007 Revenue Breakdown

£349.6m

Other5%

Broker Services47%

Issuer Services18%

Information Services

30%

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Business Profile – Borsa Italiana

Business DescriptionCash Equities• 318 listed companies as at May 2007• Daily shares trading average of 307,301 trades and €6.46bnDerivatives• 95% market share of Italian equity derivatives tradingMTS• Europe’s leading market for wholesale electronic fixed

income products• 1,166 market participants with total trade volumes of

€18.7trn in 2006• MTS is controlled (60.37% owned) by a joint venture between

NYSE Euronext (51%) and Borsa Italiana (49%)• Borsa Italiana exercised its call on NYSE Euronext’s stake last

weekPost-Trade• Most efficient post-trade service provider in Europe

FY 2006 Revenue Breakdown

€278.5m

Segmental Analysis

Information & Other Services

17%

MTS10%

Settlement & Custody

23%

Listing11%

Derivatives Trading

7%

Cash Trading19%

Clearing13%

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Diversified Business Model

(1) LSE figures for year ending 31 March 2007(2) Including Information and other services(3) Including both cash and derivatives(4) 2006 Annual Reports (LSE: 2007); exchange rates annual average: 1£=1.4670 Euro; 1£=1.843$; 1£=13.5738 Kr(5) OMX marginal post-trade revenues included in Trading, as not separately disclosed

27

13

15

45

35

114

50

15

43

1

41

41

0

22

37

Services(2)

Post-trading

Listing

Trading(3)

LSE+ Borsa Italiana(1,4)

(pro-forma)

NYSE Euronext(4)

Deutsche Börse(4)

NASDAQ+ OMX(4,5)

Revenue by business area (%)

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Synergies

• At least £20m (€29m) cost synergies expected in FY 2010

• Revenue synergies of £20m (€29m) expected in FY 2011 reflecting enhanced growth opportunities:

– Creating attractive cross-market access opportunities via the operation of both markets on TradElect, and enlarging the liquidity pool available to listed companies;

– Accelerating the development of the SME marketplace in Italy, and other European markets;

– Linking equity derivatives product offerings, creating a larger liquidity pool for existing and new products;

– Adding new bond products on to the MTS trading platform; and – Expanding Borsa Italiana’s highly efficient clearing services to other European

markets.

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Group and Board Structure

• Combined group incorporated in the UK with listing in London and intended listing in Milan

• Massimo Capuano will be responsible for the integration of the combined businesses

• Boards of exchanges with executives from both markets and majority composition of local directors

Position Name Existing Seat Chairman (Non-Executive) Chris Gibson-Smith LSE

Deputy Chairman (Non-Executive) Angelo Tantazzi Borsa Italiana

Chief Executive (Executive) Clara Furse LSE Deputy Chief Executive (Executive) Chief Executive Borsa Italiana

Massimo Capuano Borsa Italiana

Finance Director (Executive) Jonathan Howell LSE

7 other non-executive directors 4 x LSE 3 x Borsa Italiana

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Conclusion: A compelling vision for the future as a powerful and diverse global industry leader

Unique valueproposition in

the global exchange

sector

Exchange platform “of choice” for European and international customers… To create an even stronger growth story

Building the World’s Capital Market– Comprehensive and efficient service

offering– Prime access point for global investors,

intermediaries and issuers– State-of-the-art IT to provide services– Critical mass and unique business

proposition to play a leading role:• Global exchange • Efficient along the whole value chain• Local focus and domestic

requirements preserved

Issuers– Truly global network– Pre-eminent exchange offering (products,

brand)Intermediaries– The largest European equity market– Broad range of services offered

efficiently in an open business model reducing the costs of trading

Investors– Unparalleled product offering and liquidity

pool– Largest pool of global capital– Comprehensive information services

offering

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Appendices

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Creation of the largest European equities liquidity pool covering nearly 50% of FTSEuroFirst 100 companies

Market capitalisation of domestic listed companies (May 2007, €bn)

Average daily turnover (YTD 07, electronic order book only, €m)

Number of listed companies (May 2007)

OMX

SWX

Deutsche Börse

BME

Euronext

LSE + Borsa Italiana

1 Including 3,179 holding companies listed at MAB (Mercado Alternativo Bursatil)Source: FESE, exchange statistics and websites

LSEBorsa Italiana

3,630

4,103

6,405

9,367

12,307

18,116

Deutsche Börse

BME

Euronext

LSE + Borsa Italiana

OMX

SWX

3,835

3,130

1,470

1,129

983

966 SWX

Deutsche Börse

Euronext

OMX

LSE + Borsa Italiana

3,540

1,196

809

764

345

BME1 3,418

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Leveraging the leading global growth market

– A new growth market targeted at Italian issuers and enhancing European and international profile

– Offering issuers an enlarged pool of available capital

– Acceleration of Borsa Italiana’s SME market segments, complementing the MAC and Expandi

– New opportunities for the financial advisory community and broader choice for investors

– Accelerates development of the Italian equity markets through opportunities to increase GDP/market cap ratio of 55%

– Borsa Italiana’s strong brand and high velocity small cap trading

– Significant Italian SME base– Strong retail, on-line and

semi-professional investor base

– AIM model proven as the most successful in attracting international IPOs

– Strong institutional and international investor base

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A new force in the European fixed income markets

– A leading European player

– Broad coverage of primary and secondary markets in Europe

– Potential to enter new fixed income markets

– Opportunity to serve evolving investor needs and new types of market participant

– Improvement upon current inter-dealer and dealer to client models

MTS European and global positioning, expertise and platform

LSE’s UK and international bond listing business

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Italian product design and expertise

Innovation and cross selling opportunities in derivatives

– Significant business potential to develop combined derivatives businesses

– Develop a market in UK and other European equity derivatives products, based on European market leadership in cash equities

– Leverage Borsa Italiana’s market position in developing pan-European securitised derivatives offering

– Enhance customer networks due to relatively low member overlap between IDEM and EDX

London market power and investorcommunity

Unique linked exchange model pooling x-border liquidity

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Leveraging the most efficient provider of post-trade services in Europe as the industry opens up

Borsa Italiana’spost-trade pricing appreciably more attractive than competitors

Sustainable advantage due to significantly lower costs

– Opportunity to leverage Borsa Italiana’s efficiency in post-trade services

– Using the principles set out in the European Code of Conduct

Price per post-trade of cash transaction (per trade, single side)

Borsa Italiana

London

EuronextParis

DeutscheBorse

Virt-X

ClearingSettlement

Source: U Competition Commission report