UniCredit Chief Executive Federico Ghizzoni said: "It seemed the right moment to sell. It is part of the strategic plan we announced in November when we said we would sell some holdings."
The decision to sell follows the downgrading of both the banks by a rating agency over worries regarding quality of their asset and limited access to market funding.
According to industry sources, the combined stakes account for over 11% of ordinary LSE shares.
UniCredit sold 16.6m ordinary LSE shares, which account for £159.5m in revenues and resulting into a net gain of €120m while Intesa Sanpaolo’s 14.5m shares, amounting to £139m in revenues generated a net gain of €105m.
The sale took place through an "accelerated bookbuild" with Morgan Stanley acting as bookrunner for both banks, as reported by The Telegraph.
Since 2007, both the banks have been LSE shareholders when the exchange bought Borsa Italiana for €1.63bn (£1.31bn).
The LSE has revealed that its full-year profits had more than doubled to £640m, and is seeking to expand into continental Europe this year.
