Hong Kong Exchange proposes merger with London Stock Exchange

Hong Kong Exchange proposes merger with London Stock Exchange

Hong Kong Exchange proposes merger with London Stock Exchange

Hong Kong Exchanges and Clearing (HKEX) has launched a surprise £29.6 billion bid for the London Stock Exchange, concocting a deal that would scupper the LSE's proposed takeover of market data and analytics group Refinitiv.

HKEX said that under the terms of the deal, LSE shareholders would receive 2,045 pence in cash and 2.495 newly issued HKEX shares.

Shares in the London Stock Exchange have surged to a new all-time high following the offer, jumping 16 percent to £78.94. Acquiring Refinitiv, the former financial and risk unit of Thomson Reuters, would help the London bourse expand further into data analysis.

The group, which agreed last month to buy financial data and trading platform provider Refinitiv in a $27bn deal, said it "remains committed to and continues to make good progress" on the proposed acquisition.

Together, the two stock exchanges would be worth more than $70 billion, it said.

Bloomberg LP, the parent of Bloomberg Intelligence, competes with Refinitiv and Thomson Reuters to provide financial news, data and information.

"A takeover from Hong Kong, a special administrative region of China, could be seen as a takeover from China. It won't be easy to clear all the regulatory hurdles - the deal is super politically sensitive".

The Hong Kong approach is the latest worldwide attempt to acquire the LSE - Germany's Deutsche Boerse has failed three times in recent years, hitting opposition from politicians and regulators. Leadsom said the United Kingdom authorities would "look very carefully at anything that had security implications for the U.K".

HKEX said it meant to apply for a secondary listing of its shares on the LSE once the deal has gone through.

The proposed takeover of the LSE comes at a time when Hong Kong is beset by political upheaval.

Mr Li said earlier this year in the company's latest strategic plan that HKEX aims to be "globally connected", while being "China anchored".

Stock exchanges have been facing headwinds from alternative trading venues and new regulation.

The Hong Kong group added that it expects existing LSEG managment to stay in place if the two companies reach an agreement.

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