The Singapore Exchange (SGX) has agreed to mutually terminate merger discussions with the Australian Securities Exchange (ASX), following the Australian Treasurer's rejection of the proposed combination.
Wayne Swan rejected the proposed US$8.4 billion deal on grounds of national interest. “Let’s be clear here: this is not a merger. It’s a takeover that would see Australia’s financial sector become a subsidiary to a competitor in Asia. It was a no-brainer that this deal is not in Australia’s national interest,” he said.
Swan's decision was expected after Australia's Foreign Investment Review Board (FIRB) unanimously rejected the bid earlier this week.
“It’s not the right deal for Australia if we want to ensure the strength and stability of our financial system and it’s not the right deal for Australia if we want to enhance our links into global capital markets.” he explained. “It’s not the right deal for Australia if we want to grow our role as a financial services hub in Asia and that is the strong advice that I received from the FIRB, but it is also a view that is widely held within markets from a wide range of sources.”
Confirming the decision to withdraw from a merger implementation agreement entered into on 25 October 2010, a statement from SGX said it would continue to pursue its existing ”Asia Gateway' strategy.
“SGX, as the Asian Gateway, is well-positioned to leverage on opportunities within Asia's vibrant and dynamic economies. As Asia's most international exchange, we will continue to pursue organic as well as other strategic growth opportunities, including further dialogue with ASX on other forms of co-operation,” the statement read.
Sydney-based ASX also said that it would look for further growth opportunities. “ASX will continue to evaluate strategic growth opportunities, including further dialogue with SGX on other forms of combination and cooperation,” it said.
A series of cross-border exchange mergers have been proposed since the ASX/SGX deal was first mooted, between the London Stock Exchange and Canadian exchange group TMX, Deutsche Börse and NYSE Euronext, the latter now subject to a counterbid from exchange operators Nasdaq OMX and IntercontinentalExchange.