Hong Kong Exchanges and Clearing proposes merger with LSE

Galtero Lara
Setiembre 11, 2019

The London Stock Exchange has received a surprise £29.6bn takeover offer from Hong Kong Exchanges and Clearing - a bid that threatens the United Kingdom group's £20bn-plus acquisition of U.S. data provider Refinitiv. Acquiring Refinitiv, the former financial and risk unit of Thomson Reuters, would help the London bourse expand further into data analysis. Pro-democracy protesters lit fires and vandalized a metro station near the exchange on Saturday as increasingly violent clashes with police move into their fourth month.

If completed, the deal would be by far the largest in HKEx's history.

"Shareholders won't be rushed to make a decision as we like the Refinitiv deal, he added". "The share price reaction one hour after the approach says the market does not believe it will be successful".

"The fact that the LSE share price has already retreated from the initial 10% spike on release of the news may reflect some initial scepticism around the likelihood of the deal going through".

In 2017, the European Union blocked an attempted merger between the LSE and Germany's Deutsche Boerse, saying a "de facto monopoly" would be created for some financial services.

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The Asian exchange, however, said it was confident the takeover faced no major regulatory hurdles due to little overlap in markets. HKEX's proposed move could fall at the same hurdle, said Ronald Wan, chief executive at Partners Capital International Ltd in Hong Kong.

"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses".

"A takeover from Hong Kong, a special administrative region of China, could be seen as a takeover from China".

HKEX said in a statement on September 11 that it has made an offer worth 8,361 pence a share to combine the two companies.

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