Singapore Exchange today unveiled an USD 8.3 billion takeover offer for ASX Ltd,a transaction that would create one of the top five bourses in Asia. ASX Ltd,that operates the Australian Securities Exchange (ASX),and SGX have entered into a merger implementation agreement for the proposed deal. Announcing the plan,SGX and ASX said the deal would be worth 8.4 billion Australian dollars (about USD 8.3 billion). ASX shareholders would be paid a combination of 22 Australian dollars in cash and 3.473 new ordinary SGX shares for each ordinary share of ASX. "Based on SGX's last traded price of 9.54 Singapore dollars. this values ASX at 10.7 billion Singapore dollars (8.4 billion Australian dollars) or 48 Australian dollars per share," the firms said in a joint statement. Subject to regulatory approvals,the deal is expected to be complete in the second quarter of 2011. Both entities stressed the combination would create Asia's pre-eminent exchange group and is expected to play an "important role in establishing price discovery for global commodities in Asia Pacific". "The pro forma market capitalisation of the combined group was approximately USD 12.3 billion as on October 22,2010,creating the world's fifth largest listed exchange group with a broad international shareholder base," it said. Moreover,the combination would create Asia Pacific's largest and the world's second largest base of institutional investors with combined assets under management of over USD 2.3 trillion. "(Together,ASX and SGX would offer) second largest listing venue in Asia Pacific with over 2,700 listed companies from over 20 countries," the statement noted. The combination would also offer a range of Asia Pacific equity,fixed income and commodity derivatives with over 400 contracts from over 10 countries,including India. SGX's chief executive Magnus Bocker said the combination would allow customers to maximise future opportunities,where Asia Pacific takes centre stage globally as source for capital,wealth creation and trading opportunities. Post deal,both ASX and SGX would maintain their existing brands. ASX-SGX Ltd would be the holding company of the combined group,which continue to operate out of Australia and Singapore. The group would have around 1,100 employees. The merged entity would have an international board of 15 directors from five countries,including four from ASX. Bocker is anticipated to become the chief of the combined group.
