Hong Kong Exchange Makes Surprise $36.6 Billion Bid for LSE

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Hong Kong Exchange Makes Surprise $36.6 Billion Bid for LSE(Bloomberg) -- Hong Kong Exchanges and Clearing Ltd. made an unexpected bid for London Stock Exchange Group Plc, which could potentially throw the European exchange’s own transformative deal into jeopardy.The transaction values one of Europe’s largest exchanges at 29.6 billion pounds ($36.6 billion), according to a HKEX a statement Wednesday. The Asian bourse operator had considered the ‘ambitious and far-reaching’ deal for many months, HKEX Chief Executive Officer Charles Li said. The LSE, which agreed to snap up data provider Refinitiv in a $27 billion blockbuster agreement just weeks ago, declined to comment.Both firms have been involved in exchange merger deals in recent years, with LSE failing in its attempt to combine with Deutsche Boerse AG and HKEX acquiring London Metal Exchange in 2012 for 1.4 billion pounds.“These are two major security exchanges in the world,” said Ronald Wan, chief executive at Partners Capital International Ltd. in Hong Kong. “A takeover from Hong Kong, a special administrative region of China, could be seen as a takeover from China. It won’t be easy to clear all the regulatory hurdles -- the deal is super politically sensitive.”U.K. Business Secretary Andrea Leadsom, speaking on Bloomberg Television as news of the deal broke, said the British government would scrutinize any tie-up between the exchanges. Leadsom said the U.K. authorities would “look very carefully at anything that had security implications for the U.K.”(Updates with comments from HKEX CEO and details on other exchange M&A.)\--With assistance from Harry Wilson, Sofia Horta e Costa and Moxy Ying.To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net;Kiuyan Wong in Hong Kong at kwong739@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Sam MamudiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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