Singapore agrees to Australian stock exchange takeover
The Singapore Exchange (SGX) has made official its plan to take over the Australian Securities Exchange (ASX), marking the first consolidation of major stock exchanges in the Asia Pacific region. SGX will buy ASX at A$48 (US$47.7) a share, higher than its closing price of A$34.96 on Friday. ASX shares rose to $43.89 after the announcement, though the SGX price fell 5.8%.
The merger was unanimously approved by both companies’ boards, though it will still require Australian government approval. Australia’s competition regulator (ACCC) said it does not have any objections, but Australia’s current minority government is propped up by rural independents who could potentially complicate matters . Of primary concern to Australians is SGX’s ties to the Singapore Government, through its 23% ownership by the Financial Sector Development Fund and Singapore’s central bank.
The new entity will be the second largest stock exchange in Asia after Tokyo, and fifth largest in the world. SGX is already Asia’s #2 and ASX its #3.
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