Yet, there are a number of equity and commodities exchanges that are already linked. The Intercontinental Exchange (ICE) in the US, for example, owns a number of financial and commodities exchanges, including the New York Stock Exchange.
HKEX’s £29.6-billion ($36.5-billion) proposal to acquire the LSEG
was announced on Wednesday September 11, and comes seven years after the Hong Kong business acquired the London Metal Exchange for £1.4 billion.
The purchase of the LME
from its members gave HKEX a global presence outside of Asia and was deemed controversial by some in the metals market at the time the deal was announced.
Now HKEX has announced its intent to broaden its global presence further by acquiring the LSEG, raising eyebrows for a second time.
“I can’t really see how any antitrust authority would approve having the two big London exchanges under one umbrella,” one trader said.
“It is less about what HKEX and the LME want to do but more about what the Financial Conduct Authority will say, it’s one to watch,” a second trader said.
Sources close to the matter told Fastmarkets that there are no regulatory issues with HKEX owning both the LME and the LSEG.
“The factual position is that there would clearly be no overlap in the businesses. Both are leaders in their own individual fields,” a spokesperson for HKEX said.
HKEX and the LME declined to comment further given that the proposal is still in its early stages.
The LSEG responded to the offer by saying it was unsolicited, preliminary and highly conditional, noting that there have been failed mergers of the same variety in the past.
A $31-billion merger between LSEG and Germany’s Deutsche Börse fell through in March 2017 following a European Commission anti-monopoly ruling, which also blocked the sale of the Paris arm of LSEG's London Clearing House (LCH) to French bourse Euronext.
Regulators in the United States also quashed an attempt by a group of China-based investors to acquire the Chicago Stock Exchange in 2018.