Hong Kong Exchanges bids $39bn to take over London Stock Exchange

Hong Kong stock exchange

London Stock Exchange gets £32bn Hong Kong bid

Hong Kong Exchanges and Clearing (HKEX) has launched a surprise £29.6 billion bid for the London Stock Exchange, concocting a deal that would scupper the LSE's proposed takeover of market data and analytics group Refinitiv.

The proposed transaction values the LSEG at about 29.6 billion pounds (36.6 billion US dollars), according to a statement by the HKEX.

HKEX says the combination would create a leading market infrastructure group with a global footprint and, crucially, close ties to China.

He added, "Together, they would provide an unprecedented market connectivity platform for global market participants, unleashing a new generation of opportunities on the world's first truly global exchange".

The deal will be funded by a combination of existing cash and a new credit facility, according to the HKEX.

"The London Stock Exchange has historically fought off approaches from overseas, preferring instead to be the acquirer", Hunter said, adding that the merger would also raise "political questions" both in terms of historical considerations and the ongoing trade dispute between China and the United States. The LSE said its board will consider the proposal.

However, HKEX added that a condition of the offer would be LSE shareholders rejecting plans for a US$27bn all-share merger with Refinitiv, which was originally announced in July, before the end of the year.

The Asian bourse operator had considered the "ambitious and far-reaching" deal for one of Europe's largest exchanges for many months, HKEX Chief Executive Officer Charles Li said in a statement Wednesday.

HKEX's publication of its offer caught the London Stock Exchange off-guard.

LSEG stock surged 6.5% on the news.

The proposed takeover of the LSE comes at a time when Hong Kong is beset by political upheaval.

The approach by the Hong Kong company comes as Britain is set to leave the European Union, a step some politicians fear could weaken its status as a major financial center.

Hunter noted the fact that part of the proposal requires the LSE to back away from its recent deal to acquire Refinitiv, saying this appears to be an early stumbling block.

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