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SGX, ASX agree Asia's first ever stock market merger

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The Singapore Stock Exchange (SGX) and Australian Securities Exchange (ASX) have agreed to Asia Pacific's first-ever merger of stock exchanges, with a friendly takeover offer from SGX that values ASX at A$8.4 billion ($8.2 billion).

SGX will offer ASX a 37% premium on its Friday closing share price for every share taken up, and pay the rest in cash. The merger, which is still subject to regulatory approval, would create the world's fifth-largest exchange by market cap at $1.9 trillion, and Asia's second-largest behind HKEX. SGX CEO Magnus Bocker and Chairman-elect Chew Choon Seng are likely to become CEO and Chairman of the combined entity, with ASX Chairman David Gonski as Deputy Chairman. The deal has been unanimously recommended by the boards of both bourses. Each member would retain its own separate branding and local entity.

The merger is seen as partly defensive, to offset the challenges of online trading systems. ASX is due to lose its domestic monopoly in 2011, with competing platform Chi-X Global due to open in Australia shortly. Both exchanges also face limited domestic growth opportunities, with ASX in particular looking for ways to tap into Asian investment and demand.

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