Sat, Apr 09, 2011 - Page 10 News List

Australia rejects Singapore’s stock exchange takeover


Australia rejected the Singapore stock exchange’s US$8.3 billion takeover bid for the Australian stock market operator yesterday, with the federal treasurer saying the merger would not be in the nation’s interest.

The decision was expected, with Australian Treasurer Wayne Swan signaling earlier in the week that Australia was planning to scuttle Singapore’s cash and shares offer for the Australian Securities Exchange Ltd (ASX). The proposal, announced in October, would have created one of Asia’s leading stock markets.

“My decision to disallow the proposal was based on clear, unambiguous and unanimous advice from the Foreign Investment Review Board that this takeover would be contrary to out national interest,” said Swan, who has veto powers on major foreign investments in Australia.

The proposal had faced opposition from key lawmakers in Australia, who raised concerns about Singapore’s human rights record and whether Australia would actually benefit from a combined stock exchange company headquartered overseas.

“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,” Swan said.

The two companies had hoped the deal would help them compete as larger global exchanges join forces.

Nasdaq OMX Group Inc and another US-based market, the IntercontinentalExchange Inc, have made a joint US$11.3 billion bid for NYSE Euronext, the parent company of the New York Stock Exchange (NYSE). That could lead to a bidding war with Deutsche Boerse, which agreed a US$10 billion deal with the NYSE in February.

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