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Australia to block ASX-SGX deal

05 April 2011  |  6926 views  |  0 STOP

Australia's government is set to block the A$8.4 billion takeover of ASX by the Singapore Exchange, arguing the move is not the national interest.

Although he has not yet formally rejected the proposal, Australian Treasurer Wayne Swan says the country's Foreign Investment Review Board has advised him the deal is contrary to national interest.

SGX says it has since been notified by the board that Swan is "disposed to reject the proposed merger" although the bourse has been invited to offer further comment and "will consider appropriate responses".

In a statement, ASX says: "The ASX Board maintains an ongoing belief in the need for ASX participation in regional and global exchange consolidation. This, together with the business logic of the combination proposal announced with SGX on 25 October 2010, resulted in the ASX Board unanimously recommending the ASX-SGX merger proposal to ASX shareholders. In this context ASX will continue to evaluate strategic growth opportunities (including further dialogue with SGX on other forms of combination and co-operation)."

SGX and ASX agreed a deal back in November as they sought to strengthen their positions in the region. Since then there has been a rush to consolidate among the world's biggest operators.

Last week Nasdaq OMx and IntercontinentalExchange joined forces to try and wrestle Nyse Euronext from the clutches of Deutsche Bourse while the London Stock Exchange and Canada's TMX are also looking to merge.

However, this deal also faces regulatory hurdles and an Ontario committee investigating the merger has just delayed reporting its findings, according to the Financial Times.

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