HKEX makes US$36.6 billion surprise bid to take over London Stock Exchange to grow into a global financial marketplace
- HKEX made an indicative offer to pay £83.61 per LSE share in cash and stock for the London bourse operator, valuing it at £29.6 billion
- The takeover would be the HKEX’s second overseas acquisition by after its 2012 purchase of the London Metal Exchange
Hong Kong Exchanges and Clearing Limited (HKEX) has made a surprise takeover bid for London Stock Exchange Group (LSE), taking its boldest step yet to expand into a global financial marketplace from its current status as China’s offshore fundraising hub.
HKEX made an indicative offer to pay £83.61 per LSE share in cash and stock for the London bourse operator, valuing it at £29.6 billion (US$36.6 billion), according to a filing after Hong Kong’s market hours.
“A combination of HKEX and LSE represents a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe,” the HKEX chairwoman Laura Cha Shih May-lung said in her filing.
The takeover bid – described by the LSE as unsolicited, preliminary and highly conditional – comes seven years after HKEX’s £1.39 billion purchase in 2012 of the London Metal Exchange (LME), a push into commodities trading that paid off for the Hong Kong company in its interim financial results.
The new purchase would give HKEX access to London’s fixed income financial products, as well as the FTSE Russell portfolio of index benchmarks used by institutional investors. The FTSE100 index is capitalised at US$2.4 trillion, while Hong Kong’s benchmark Hang Seng Index is valued at US$2.2 trillion, with another US$1.55 trillion capitalisation in the H-shares index.
