Interpac Business and Migration Solutions Melbourne Australia

(October 25, 2010)

THE operator of Australia's stock exchange, ASX, has entered into an agreement to merge with the Singapore Stock Exchange (SGX), to create the second largest exchange in the Asia Pacific region.

Under the $8.4 billion plan, SGX will buy all the shares in ASX through a scheme of arrangement, paying $22 cash and 3.473 new SGX shares for each ASX share.

The deal will benefit both companies and create a $US1.9 trillion market that will be attractive to high-frequency traders and companies seeking capital.

The deal values the ASX at $8.4 billion, or $48 per ASX share.

Shares in ASX traded last at $34.96, before entering a trading halt late on Friday.

When ASX resumed trading on the Australian exchange this afternoon, an hour after the deal was announced, the stock immediately rose to $43 before touching a peak of $43.89 half a minute after trading resumed.

At 1:04pm (AEDT), the stock was at $43.49, up $8.53 or 23.4 per cent.

The merger remains subject to significant regulatory hurdles in Australia and in Singapore, including the approvals of the Treasurer Wayne Swan, the Australian Securities and Investments Commission (ASIC), and the Monetary Authority of Singapore.

Both parties expect necessary shareholder meetings and court proceedings to take place in the first half of 2011, and the merger to be implemented in the second half of the year.

The combined entity will have pro-forma revenues of about $US1.1 billion ($1.12 billion) and earnings before interest and tax of about $US700 million ($711.6 million).

The combined market capitalisation of the two groups was about $US12.3 billion ($12.5 billion) at October 22.

The merged entity would provide investors access to over 2700 listed companies from over 20 countries, and the world's second largest grouping of resources stocks.

It also would include the largest range of Asia Pacific equity, fixed income and commodity derivatives, with more than 400 contracts from over 10 countries.

"The combination leverages the strengths of ASX through its listings, stock options and fixed income franchises, with SGX, the Asian gateway for international listings, equity futures and OTC clearing, to create the regions preeminent exchange group," ASX said.

Exchanges to retain their brand

Each exchange operator will remain separate legal entities and hold on to their respective brands. ASX-SGX will be the holding company and listed on both the Australian and Singaporean exchanges.

It will have a board of 15 directors from five countries, four of whom will come from the ASX board - David Gonski, Russell Aboud, Jillian Broadbent and Alan Cameron.

Magnus Bocker, chief executive officer of SGX, is anticipated to become the CEO of the combined group.

Chew Choon Seng, SGX chairman-elect, is anticipated to be the non-executive chairman of the combined group, while Mr Gonski, ASX chairman, will be deputy chairman of the combined group.

ASX CEO Robert Elstone said the merger was unanimously recommended by the boards of each group.

"In a period of profound structural change in financial markets, ASX has carefully considered its strategic options to enhance its future competitiveness," he said.

"This combination delivers tangible value today and presents the opportunity for shareholders, customers, employees and other stakeholders to participate in the growth options that this broader based exchange group can make available in the future, whilst preserving strong governance and regulatory oversight in Australia."

(Source:News.com.au)

(October 25, 2010)

THE operator of Australia's stock exchange, ASX, has entered into an agreement to merge with the Singapore Stock Exchange (SGX), to create the second largest exchange in the Asia Pacific region.

Under the $8.4 billion plan, SGX will buy all the shares in ASX through a scheme of arrangement, paying $22 cash and 3.473 new SGX shares for each ASX share.

The deal will benefit both companies and create a $US1.9 trillion market that will be attractive to high-frequency traders and companies seeking capital.

The deal values the ASX at $8.4 billion, or $48 per ASX share.

Shares in ASX traded last at $34.96, before entering a trading halt late on Friday.

When ASX resumed trading on the Australian exchange this afternoon, an hour after the deal was announced, the stock immediately rose to $43 before touching a peak of $43.89 half a minute after trading resumed.

At 1:04pm (AEDT), the stock was at $43.49, up $8.53 or 23.4 per cent.

The merger remains subject to significant regulatory hurdles in Australia and in Singapore, including the approvals of the Treasurer Wayne Swan, the Australian Securities and Investments Commission (ASIC), and the Monetary Authority of Singapore.

Both parties expect necessary shareholder meetings and court proceedings to take place in the first half of 2011, and the merger to be implemented in the second half of the year.

The combined entity will have pro-forma revenues of about $US1.1 billion ($1.12 billion) and earnings before interest and tax of about $US700 million ($711.6 million).

The combined market capitalisation of the two groups was about $US12.3 billion ($12.5 billion) at October 22.

The merged entity would provide investors access to over 2700 listed companies from over 20 countries, and the world's second largest grouping of resources stocks.

It also would include the largest range of Asia Pacific equity, fixed income and commodity derivatives, with more than 400 contracts from over 10 countries.

"The combination leverages the strengths of ASX through its listings, stock options and fixed income franchises, with SGX, the Asian gateway for international listings, equity futures and OTC clearing, to create the regions preeminent exchange group," ASX said.

Exchanges to retain their brand

Each exchange operator will remain separate legal entities and hold on to their respective brands. ASX-SGX will be the holding company and listed on both the Australian and Singaporean exchanges.

It will have a board of 15 directors from five countries, four of whom will come from the ASX board - David Gonski, Russell Aboud, Jillian Broadbent and Alan Cameron.

Magnus Bocker, chief executive officer of SGX, is anticipated to become the CEO of the combined group.

Chew Choon Seng, SGX chairman-elect, is anticipated to be the non-executive chairman of the combined group, while Mr Gonski, ASX chairman, will be deputy chairman of the combined group.

ASX CEO Robert Elstone said the merger was unanimously recommended by the boards of each group.

"In a period of profound structural change in financial markets, ASX has carefully considered its strategic options to enhance its future competitiveness," he said.

"This combination delivers tangible value today and presents the opportunity for shareholders, customers, employees and other stakeholders to participate in the growth options that this broader based exchange group can make available in the future, whilst preserving strong governance and regulatory oversight in Australia."

(Source:News.com.au)