THE London Stock Exchange has agreed plans to merge with Canada’s TMX in a move to create one of the world’s biggest share trading platforms.
The proposed tie-up with TMX, which operates the Toronto Stock Exchange, will make the new business a dominant player for mining company listings at a time of surging commodity prices.
It will have headquarters in both London and Toronto. LSE chief executive Xavier Rolet will continue in the role for the merged group.
The link-up has been presented as a merger of equals – but existing LSE shareholders will hold 55% of the enlarged business.
With more than 6,700 listings, the group will be the world’s largest exchange by numbers of companies traded, with an aggregate market capitalisation in the region of £3.7 trillion.
The groups, which entered into a strategic partnership in March, 2009, have confirmed they are in merger talks and unveiled the terms of the deal in a stock market announcement.
The merger, which is subject to shareholder and regulatory approvals, is expected to be completed in the second half of this year.
It follows an announcement that the Singaporean and Australian stock exchanges plan to merge. Both the LSE and TMX have benefited from the commodities boom. TMX claims to be the world’s leading resources market while about a third of the companies on London’s FTSE 100 Index come from the mining and energy sectors.
LSE’s shares rose by 3% or 28p to 920p yesterday.
Mr Rolet hailed “an incredibly exciting merger with considerable growth opportunities.”
TMX chief executive Thomas Kloet said the deal would give Canadian customers access to new pools of capital and European firms a gateway to North American financial markets.