SGX, ASX revamp exchange merger proposal

Singapore Exchange Limited (SGX) and ASX Limited, operator of the Australian Securities Exchange, announced changes to their merger proposals on Tuesday in a bid to boost the deal's chances of getting regulatory approval in Australia.


BALANCE AT BOARD OF DIRECTORS


Under the revised proposal, there will be an equal number of Australian and Singaporean directors on the board of the firm formed after the merger. The 13-member board will comprise five Australian citizens, five Singaporeans and three international directors, SGX and ASX said in a joint statement.


The new proposal also makes it clear that current ASG Chairman David Gonski will be deputy chairman of the SGX-ASX firm while current SGX chairman Chew Choon Seng will be chairman of the new firm. Gonski will also chair the integration committee charged with overseeing a successful integration, in an obvious attempt to strike a balance.


SGX will also commit to ensuring ASX and all of its licensed subsidiaries maintain boards with a majority of Australian citizens and an Australian chair.


In addition, all physical assets required for the operation of the ASX group businesses will continue to be developed and located in Australia.


The Australian business will also be run by a chief executive based in Australia so as to provide easy access to customers and stakeholders.


The existing regulatory protections will continue to be in place after the completion of the merger deal.


AUSTRALIAN INTERESTS


The two companies said the changes to the proposal came after talks with a wide range of stakeholders.


"There commitments demonstrate SGX's belief in the merits and benefits of the merger, address concerns that have been expressed, and provide further clarity as to how the merged entity will operate in the future," said Chew Choon Seng, chairman of SGX.


"The changes and commitments announced today, combined with existing regulatory protections, strengthen our belief that the ASX-SGX merger proposal is in the best interests of shareholders and in the national interest of Australia," ASX chairman David Gonski said.


The two exchanges announced their 8.3 billion U.S. dollar merger proposal on Oct. 25, 2010. If successful, it is expected to create the world's fifth largest exchange operators.


Australian regulators have yet to make a decision on the deal.


MERGER WAVE


The firms also alluded to the recent wave of merger deals involving leading exchanges in North America and Europe.


"Recent developments in global exchange mergers affirm the judgment of the ASX board that ASX must participate in regional and global consolidation," Gonski said.


London Stock Exchange recently announced a 6.9 billion U.S. dollars bid to take over Toronto Stock Exchange operator TMX Group.


Deutsche Boerse AG also announced on Tuesday that it has agreed with New York bourse NYSE Euronext on a 24 billion U.S. dollar merger.


ASX also said last week that the mergers underline the global trend of consolidation among exchanges, but stopped short of commenting on the implications of its own merger with SGX.


ASX again alluded to the latest developments in the joint announcement with SGX on Tuesday.


"The recent merger announcements ... underscore the dynamic forces that are driving developments across the world's major licensed exchange market operators," said Robert Elstone, managing director and chief executive officer of ASX.


Singapore media have quoted analysts as saying that the recent wave of mergers will boost the chances of success for SGX and ASX.


SGX will lodge its formal application with the Australian foreign investment review board in the coming weeks, chief executive officer Magnus Bocker said on Tuesday.
(Source:http://news.xinhuanet.com)