Singapore’s stock exchange has unveiled an agreed takeover bid for its Australian equivalent in a drive to compete with the region’s other financial powerhouses, Hong Kong and Tokyo.
Under the proposed deal, the merger between SGX and ASX, the company that owns the Sydney-based exchange, would be worth almost six billion euros. It still has to be approved and faces several hurdles, notably in Australia.
The two companies would remain separate entities.
“There have been cross-border exchange mergers before, but never a consolidation arguably involving the east and the west – and moreover, never one positioned as this group will be, in the fastest growing region of the world,” said ASX Chief Executive Robert Elstone.
Australia’s parliament needs to lift a 15 per cent ownership cap on ASX, and it is thought that regulators may be sceptical about the deal.
ASX shares have been trading below the offer price because of the potential obstacles.