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This could be a big play for the Chinese washing machine that is Hong Kong.
Hong Kong Exchanges and Clearing Ltd. made an unexpected bid for London Stock Exchange Group Plc, which could potentially throw the European exchange’s own transformative deal into jeopardy.
The transaction values one of Europe’s largest exchanges at 29.6 billion pounds ($36.6 billion), according to a HKEX a statement Wednesday. The Asian bourse operator had considered the ‘ambitious and far-reaching’ deal for many months, HKEX Chief Executive Officer Charles Li said. The LSE, which agreed to snap up data provider Refinitiv in a $27 billion blockbuster agreement just weeks ago, declined to comment.
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The regulators will be looking closely at this one, the last planned merger with German Deutsche Boerse fell through back in 2017.
The US Nasdaq and the Chicago Mercantile Exchange (CME) have also both previously shown interest in the London Stock Exchange, however whether there is a counter offer or other interested parties remains to be seen. As for CME it bought London's NEX exchange last year for $5.5 Billion.
ThelLSE- Hong Kong merger also seems to depend on whether the LSE goes ahead with it's $27 billion take over of Refinitiv, a move the company said would transform it into a UK-headquartered, global rival to Michael Bloomberg’s financial news and data business.
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Actually I stand corrected, as according to the London Evening Standard it would create the second biggest exchange in the world after the NYSE and would be bigger than NASDAQ.
With trading volume down so much I wouldn't be surprised if they made a deal. It would make better sense for HK to wait a few years but my guess is the CCP printing press can't wait that long.
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Originally Posted by NorCal77
Indeed. It would be the second biggest exchange.
With trading volume down so much I wouldn't be surprised if they made a deal. It would make better sense for HK to wait a few years but my guess is the CCP printing press can't wait that long.
Three problems have emerged, and the deal now looks dead in the water.
Firstly the offer does not meet the estmated value of the LSE.
Secondly UK and US Authorities and Regulators are not happy with the prospect of Chinese Controlled Homg Kong Stock Exchange owning the LSE. As a lot of US trade passes through the LSE, so both the UK and US views on the matter are important
Third the LSE has indicated it's not interested and would rather proceed with the $27 billion take over of Refinitiv.
It's often difficult to do deals in terms of merging stock exchanges due to national concerns and information security.
The merger that would make the most sense would be between the NASDAQ and LSE, as pointed out in the 2017 article below in relation to Credit Suiises own research on stock exchange mergers.
HK will fail. China has decided, given those thugs protesting and trashing the city all the while hiding behind their face masks, that this old British colonial outpost has too many chinese traitors with brainwashed nostalgia for the supposed benevolent rule of Britain. HK is slated to become a third tier regional town. Shenzhen and Shanghai are in. Why would china support hk’s anything?
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