HKEX, LSE deal unlikely to be consummated, analyst says

Business | 12 Sep 2019 12:23 pm

Louis Capital analyst Ben Kelly said he does not expect a deal London Stock Exchange Group and  Hong Kong Exchanges and Clearing to be consummated, citing likely political opposition over national security concerns, Bloomberg reports.

History is littered with failed attempts to complete cross-border exchange mergers, including at least three attempts by the LSE to combine with Deutsche Boerse AG.

The final plan to sell LSE to Deutsche Boerse to create a US$30 billion behemoth fell apart when regulators blocked the deal in 2017.

Singapore Exchange Ltd’s US$8.8 billion bid for ASX Ltd collapsed after the Australian government said the deal wasn’t in the national interest.

European Union regulators vetoed Deutsche Boerse and NYSE Euronext’s plan to create the world’s biggest exchange after concluding that the merger would hurt competition.

Nasdaq OMX Group Inc. and Intercontinental Exchange Inc. abandoned an unsolicited bid for NYSE Euronext in 2011.

The U.K. government may not wish to see such a vital symbol of U.K. financial-services strength, and indeed a strategic asset, to be owned by foreigners,” said Neil Wilson, chief market analyst at Markets.com. “One rather feels U.K. shareholders will be looking at the glass half empty as far as exposure to Hong Kong goes right now.”

 

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