Hong Kong Exchanges and Clearing Limited (HKEX) has confirmed that it has submitted a £30bn merger proposal to the Board of London Stock Exchange Group (LSEG) which seeks to establish a “global market infrastructure leader”.
The merger, which the board of HKEX has emphasised ‘represents a highly compelling strategic opportunity’, would offer the LSE a new chance to cement its position across key Asian markets.
Charles Li, Chief Executive of HKEX, said: “Bringing HKEX and LSEG together will redefine global capital markets for decades to come. Both businesses have great brands, financial strength and proven growth track records.
“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. A combined group will be strongly placed to benefit from the dynamic and evolving macroeconomic landscape, whilst enhancing the long-term resilience and relevance of London and Hong Kong as global financial centres.”
As part of the proposed merger HKEX, which is required under City rules to make an offer by 9 October, also suggested that it would look into seeking a secondary listing in London on the completion of a merger.
The firm’s statement said: “The proposed combination would strengthen both businesses, better position them to innovate across markets and geographies, and offer market participants and investors unprecedented global market connectivity.”
Laura Cha, Chairman of HKEX, added: “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.”
The HKEX statement added that the merger of the two companies would be ‘highly complementary’ and would pave the way for the two to work to ‘deliver a clear path to completion.’
LSEG said in response: “HKEX has made an unsolicited, preliminary and highly conditional proposal to acquire the entire share capital of LSEG.
“The board of LSEG will consider this proposal and will make a further announcement in due course.
“LSEG remains committed to and continues to make good progress on its proposed acquisition of Refinitiv Holdings Ltd as announced on 1 August 2019.
“A circular is expected to be posted to LSEG shareholders in November 2019 to seek their approval of the transaction.”