London Rejects Takeover Bid from Hong Kong Stock Exchange

  • At present, both Hong Kong and London are shrouded in political turmoil.
  • On Wednesday, the Hong Kong Exchanges and Clearing Limited filed a combined offer with the London Stock Exchange for a total of £29.6 billion.
  • However, on Friday, the board of directors of the London Stock Exchange unanimously rejected the M&A advice of the Hong Kong Stock Exchange. 

Earlier this week, the Hong Kong Stock Exchange pitched a combined offer to take over the London Stock Exchange for $39 billion. However, London, which is worried about the weakening of its financial center status, has not picked up the olive branch that Hong Kong has thrown.

The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. It is Asia’s third-largest in terms of market capitalization behind the Tokyo Stock Exchange and Shanghai Stock Exchange, and the fourth single largest stock market in the world. As of 2018, it has 2,315 listed companies with a combined market capitalization of HK$29.9 trillion.

At present, both Hong Kong and London are shrouded in political turmoil. This week, news of the “strong alliance” of all the securities transactions in the two cities was reported.

On Wednesday, the Hong Kong Exchanges and Clearing Limited filed a combined offer with the London Stock Exchange for a total of £29.6 billion. The contents of the offer were announced by the Hong Kong Stock Exchange. Li Xiaojia, president of the Hong Kong Stock Exchange, said that the London Stock Exchange and the Hong Kong Stock Exchange are the financial infrastructures of the world’s most important markets.

If they are successfully combined, they will create a world-leading global layout, and cover three major time zones in Asia and Europe. At the same time, it provides an international exchange group for major currencies such as the US dollar, the Euro, and the Renminbi. The total market value of its financial transaction services is expected to exceed $70 billion.

This move by the Hong Kong Stock Exchange is at a time of political turmoil in both Hong Kong and London. If the two stock exchanges merge, they will aim to integrate forces and compete with American rivals, such as the Intercontinental Exchange Group (ICE) and the Chicago Mercantile Exchange (CME).

However, on Friday, the board of directors of the London Stock Exchange unanimously rejected the M&A advice of the Hong Kong Stock Exchange. The London Stock Exchange has long hoped to strengthen its business in the Asian region. Not long ago, it opened the interconnection mechanism with the Shanghai Stock Exchange, namely “Huluntong.” The UK is currently at a critical juncture from the European Union, and some politicians worry that once they leave the EU, London’s status as an international financial center will be weakened.

London Stock Exchange is a stock exchange located in the City of London, England. As of April 2018, London Stock Exchange had a market capitalization of $4.59 trillion. It was founded in 1571, making it one of the oldest exchanges in the world.

According to the “Hong Kong 01” report, as the major shareholder of the Hong Kong Stock Exchange, the Hong Kong SAR Government said on Tuesday that the “SAR Government is pleased to see the Hong Kong Stock Exchange in the direction of strategic planning, consolidate its foundation, grasp international opportunities and move towards more international development.” The British government has pointed out that it will carefully study any investment that may have a security impact on the UK.

According to the offer made by the Hong Kong Stock Exchange, the plan to acquire the London Stock Exchange will be based on the London Stock Exchange’s abandonment of the purchase of Refinitiv Holdings Ltd. The London Stock Exchange said on Friday that it is still committed to the acquisition of Lu Fu Te. The London Stock Exchange Group in August this year proposed to the US private equity giant Blackstone led the acquisition of financial data company Lu Fu Te.

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George Mtimba

George clarifies how the news is changing the world, how world news trends affect you. Also, George is a professional journalist, a freelance news reporter and writer who is passionate with current world news.


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