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Larsson steps down as OM and HEX agree merger

20 May 2003  |  5603 views  |  0 Larsson steps down as OM and HEX agree merger

Stockholmsbörsen operator OM is to merge with neighbouring Finnish exchange HEX under an agreement which will also see the departure of OM's long-standing chief executive Per Larsson.

The merger will create an integrated Nordic and Baltic market for listing, trading, clearing, settlement and depository of securities. The new business, to be branded OM HEX will also be a leading provider of marketplace services and transaction technology.

The offer value for outstanding shares in the Helsinki Exchange amounts to Skr1575 million (EUR 171 million), based on OM's closing share price of Skr53, valuing the business at Skr2126 million (EUR 231 million).

OM's current chief executive Per Larsson has agreed to make way for a new CEO for the combined business, drawing the blinds on an 18-year career at the Swedish transaction technology firm - the last seven as CEO. Larsson's deputy, Magnus Böcker takes over as acting CEO until a suitable replacement can be found.

Olof Stenhammar, OM's founder and chairman, paid tribute to Larsson's contribution to the firm, beginning with the creation of Stockholmsbörsen, through the integration of Stockholms Fondbörs and OM's derivatives exchange, through to last year's deal with the London Stock Exchange and the establishment of the new equity derivatives market EDX London.

"With OM at the stage it is today, it is the board of directors' understanding that it is appropriate for a new CEO to take charge," says Stenhammar.

Larsson has negotiated a handsome pay-off, including two-year's pay and benefits of Skr11.2 million and a Skr3 million bonus for initiating and concluding the HEX transaction. He will also be free to exercise all employee stock options allocated within three years from his last day of employment.

Stenhammer says the merger will create value for the companies' shareholders through "substantial cost savings" realised by operational efficiencies and implementation of OM Technology's trading and CSD platforms at HEX.

The Finnish exchange, which also owns and operates the exchanges and central securities depositories (CSDs) in Finland, Estonia and Latvia, is currently using an IT platform provided by Computershare. The move to OM's technology will bring HEX into line with other Sandinavian bourses, paving the way for the creation of an integrated Nordic market operating on a single technology platform.

The merger is expected to create annual cost savings of Skr180 million within three years. Transaction and restructuring costs are estimated at around Skr360 million pre-tax, related to, for example, costs for harmonisation of technology, write-downs of certain transaction related systems in HEX and redundancies.

When the transaction is complete, OM HEX will operate through two divisions, HEX Integrated Markets based in Helsinki, and OM Technology in Stockholm.

Jukka Ruuska is proposed as president of the HEX Integrated Markets division and deputy to acting CEO and president Magnus Böcker. Kerstin Hessius is proposed deputy to Jukka Ruuska. Klas Ståhl is proposed as acting president of OM Technology division.

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