TSX operators merging with London Stock Exchange
Posted Feb 9, 2011 8:37 am.
This article is more than 5 years old.
TMX Group, which operates the Toronto Stock Exchange, and the London Stock Exchange announced Wednesday they are merging to create one of the world’s largest stock exchanges.
The merger, which is subject to regulatory approvals, is unanimously being recommended by the boards of both exchanges.
If approved, it would give the new firm a value of just over $6-billion and give LSE shareholders just over 50 per cent of the combined company.
TMX Group is valued at $2.99-billion, while the London Stock Exchange Group’s value is slightly higher, around $3.25-billion.
The new company will have the world’s largest number of listings, boasting more than 6,700 companies, with an aggregate value of $5.8-trillion.
The merger would also see the new company become the world’s biggest exchange operator for mining and energy stocks, which have been key drivers of growth for both exchanges.
Caldwell Investment Management’s Tom Caldwell tells 660News this could impact investors in a number of ways.
Not only would the merger help to broaden the product range of the TSX, but it will provide more resources to Canadian investors and possibly result in lower costs.
Shareholders for both the TSX and LSE are expected to benefit, with shares trading higher since the announcement was made.
Caldwell says he’s not surprised by the merger and thinks it was only a matter of time before this happened.
“I think it was both opportunity and threat inspired, with the banks creating their own exchange,” he says. “And I think Toronto has to respond to that in some degree.”
“I think it has to broaden its product range and expand,” he says. “And I think exchanges typically around the world are doing this,”
Caldwell says a lot of things are unclear at the moment, including whether a Canadian company will get an easy pass into the London environment for an added source of revenue.
He’s telling his clients to wait and get all the details first.
The company will be co-headquartered in Toronto and London.
