The Singapore stock exchange SGX plans to take over Sydney’s ASX to create Asia’s fifth-largest bourse.
The almost six billion euro merger would be the first major consolidation of Asia-Pacific exchanges.
The idea is for it to better compete with the other biggies in the region – Tokyo, Hong Kong, Shanghai and Mumbai.
Analysts called it a defensive move by both bourses, while ASX’s chief executive Robert Elstone said: “There have been cross-border exchange mergers before but never a consolidation arguably involving the east and the west and more over never one positioned as this group will be – in the fastest growing region of the world.”
But the deal faces several hurdles.
Australia’s parliament would have to end limits on foreign ownership of the Sydney exchange.
The country’s Foreign Investment Review Board would also have to approval the deal.
It might object to the fact that SGX is part owned by a fund which is controlled by Singapore’s central bank.
However Australia’s competition regulator said it has no major concerns.