Australia’s competition watchdog said yesterday it would not oppose an US$8.3 billion merger between the Australian and Singapore stock exchanges to create the world’s fifth-biggest bourse.
In a move that brings the deal one step closer, the Australian Competition and Consumer Commission (ACCC) said a Singapore Exchange Limited (SGX) and Australian Securities Exchange (ASX) merger would not substantially lessen competition.
“In Australia, SGX does not compete with ASX for trading, clearing or settlement services,” it said in a statement. “ASX and SGX do compete for listing services, but only to a limited extent.”
The deal, which is intended to create a regional trading hub to rival Hong Kong, is also being reviewed by Australia’s securities and foreign investment watchdogs, as well as the central bank, and must be approved by the Treasurer.
Australia’s parliament, where the center-left government of Prime Minister Julia Gillard holds just a one-vote majority in the lower house — will then have to pass a bill allowing the deal to go ahead.
The ASX and its Singapore counterpart both welcomed the decision.
“Our focus continues to be on satisfying the regulatory process that is well under way,” an ASX spokesman told Dow Jones Newswires.
“We are pleased with the decision by ACCC,” a spokeswoman with SGX said.
The Singapore bid has sparked a strong political backlash in Canberra, where key independent lawmakers have questioned Singapore’s human rights and democracy record and argued that the deal would disadvantage Australia.
Australian Greens leader Bob Brown said his party, part of the government’s fragile coalition, would vote against the deal in parliament unless the benefits of a foreign takeover of the Australian Stock Exchange were proven.
“The ACCC’s narrow mandate is no substitute for a responsible government decision,” Brown said in a statement.