LONDON • Hong Kong Exchanges and Clearing (HKEX) has made an unsolicited US$39 billion (S$53.8 billion) takeover bid for the London Stock Exchange (LSE), an offer contingent on the LSE ditching its acquisition of data company Refinitiv.
The combination would help both exchanges compete better with rivals like Intercontinental Exchange and Chicago Mercantile Exchange from the United States.
The LSE has long sought to bolster its presence in Asia, and recently launched a link scheme with HKEX competitor Shanghai.
"The board of HKEX believes a proposed combination with London Stock Exchange Group represents a highly compelling strategic opportunity to create a global market infrastructure leader," the Hong Kong exchange said in a statement yesterday.
The LSE said it was committed to and continued to make good progress on its proposed acquisition of Refinitiv.
The takeover bid by the Hong Kong company comes as Britain is set to leave the European Union, a step some politicians fear could weaken its large financial sector.
HKEX, which already has a base in London as owner of the London Metal Exchange, said it had played a key role in underpinning the City of London's position as a pre-eminent global centre for metals trading.
The proposed £31.6 billion (S$53.8 billion) cash-and-share transaction would go ahead only if the LSE's proposed takeover of Refinitiv does not proceed, HKEX said.
The LSE announced last month that it has agreed to buy Refinitiv in a US$27 billion deal aimed at transforming the exchange into a market data and analytics giant.
HKEX has been the world's largest listings venue in five of the past 10 years, alongside the New York Stock Exchange (NYSE), according to Refinitiv data.
But this year, it has fallen behind, raising US$10.8 billion to the NYSE's US$20.2 billion, with activity suffering as Hong Kong's political turmoil deepened.
HKEX said it has already begun discussions with certain regulators in Britain and Hong Kong.
"The board of HKEX believes that the two businesses are highly complementary and, as such, looks forward to working with the relevant authorities to deliver a clear path to completion," it added.
The Hong Kong government threw its support behind the takeover bid. "The government is glad to see HKEX's endeavour to enhance its core strength and seek international expansion in accordance with its strategic plan," a spokesman said.