Hong Kong Exchanges and Clearing, who own the country’s stock exchange, have placed a £32bn bid to buy the London Stock Exchange (LSE).
In a statement by Charles Li, Hong Kong Exchanges and Clearing’s (HKEX) CEO said that the deal would “redefine global capital markets for decades to come”.
He added: “Together, we will connect East and West, be more diversified and we will be able to offer customers greater innovation, risk management and trading opportunities.”
Laura Cha, Chairman of HKEX, continued: “We believe a combination of HKEX and LSEG represents a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe. 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.”
However, should the deal go ahead, they will want LSE to scrap its plans to acquire data firm Refinitiv.
HKEX believes that the proposed transaction would offer the prospect of significant synergies. In particular, the migration of HKEX’s trading and clearing platforms to LSEG’s technology, the revenue uplift in key businesses from cross-selling and innovation opportunities and a reduction in HKEX’s capital expenditures in connection with existing systems and future investment plans all present strong synergy opportunities.
LSEG shareholders would benefit from the realisation of the synergies as future shareholders of the combined group.