While the year began with a flurry of exchange merger proposals, some are going by the wayside. The Singapore Exchange’s (SGX) merger with the Australian Securities Exchange (ASX) was the first to bite the dust, due in part to nationalistic sentiment, which appears to be behind the termination of TMX Group’s (TMX) merger attempt with the London Stock Exchange Group (LSE).
"The most obvious [reason it was called off] was the emergence of the Maple Group that saw the largest of the Canadian banks coming together as a unified force to act against the TMX/LSE combination," says Sang Lee, managing partner at Aite Group.
While the Maple Group initially was given little regard by many analysts, it has at least contributed to keeping TMX out of foreign hands. "My initial reaction [to the Maple Group] was that it was kind of odd. Can you imagine if Goldman Sachs, Citi and J.P. Morgan came together today and said, ‘We’re going to launch a counter-bid for NYSE’; it’s sort of unthinkable at this point," Lee says.
TMX pulled the plug on the merger the day before the scheduled shareholder vote as it became clear that the two-thirds majority necessary for approval would not be obtained. In terminating the merger, TMX will pay a $10 million expense fee to LSE. The Maple Group plans to continue its acquisition of TMX.