Market Overview

London Stock Exchange Trying To Compete With NYSE Euronext? (NYX)

In an effort to further consolidate the exchange industry, the London Stock Exchange announced this morning it's buying TMX Group for a 6% premium in an effort to further consolidate the exchange business, and create the world's second largest exchange in terms of value of the listed companies, only behind NYSE Euronext (NYSE: NYX).

The deal values TMX at around $3.2 billion.

Shares in the LSE rose over 9% in London on the back of this news. As part of the deal, TMX shareholders will receive 2.9963 LSE shares for every TMX share they hold.

The exchange group has exchanges in the U.K., Canada and Italy. It counts over 6,700 companies with a market cap of approximately $4 trillion.

“Canadian customers will benefit from access to one of the world's deepest capital pools while European issuers will have an effective gateway to North American financial markets,” said TMX Chief Executive Thomas Kloet.

LSE Chief Executive Xavier Rolet will be CEO of company, and TMX's Kloet will become president of the group.

The companies expect around 100 million pounds worth of revenue benefits in the fifth year of the deal, and 35 million pounds of cost savings a year or two after the deal closes.

“We are creating the world's largest listings venue for the commodities, energy and natural-resources sectors, as well as the premium market for small, mid-size and growth companies,” Rolet said.

Posted-In: London Stock ExchangeNews M&A Global

 

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