London and toronto stock exchanges to merge

London Stock Exchange Group Plc, the 210-year-old bourse operator, agreed to buy Toronto Stock Exchange owner TMX Group Inc. in an all-share transaction valued at about C$3.2 billion ($3.2 billion) as the companies cut costs to counter lost market share.

LSE shareholders will own 55 percent of the enlarged group, while TMX investors will hold 45 percent, the companies said today in a Regulatory News Service statement. TMX shareholders will receive 2.9963 LSE shares for each TMX share held, valuing TMX shares at about C$42.68 each. The stock closed at C$40.28 yesterday. LSE surged 9.9 percent to 980.5 pence at 8:08 a.m. today in London.

“We are creating the world’s largest listings venue for the commodities, energy and natural resources sectors, as well as the premium market for small, mid-size and growth companies,” Xavier Rolet, chief executive officer of LSE, said in the statement. “We are aiming at nothing less than becoming a true powerhouse in the global exchange business.”

Rolet will become CEO of the enlarged group, which will be renamed after the transaction completes, according to the statement. Thomas Kloet, CEO of TMX, will be president, and Michael Ptasznik, chief financial officer of TMX, will be CFO. Raffaele Jerusalmi, CEO of LSE’s Borsa Italiana, will be a director. Stock in the new company will trade in both London and Toronto.

Source: Bloomberg