February 11th, 2011
Econintersect: Yesteday GEI News posted a news brief reporting that the HKEx (Hong Kong Stock Exchange) was seeking possible international alliances of mergers. An obvious possiblity would be the Tokyo exchange, but that entity has denied interest in any deals. Today rumors are focused on the Nasdaq, CME and the CBOE, along with India and Brazil. Even the electronic exchange BATS is in the gossip. Follow up:
Follow up:A Dealbook article has discussed merger options for the Nasdaq. From that article:
The question for exchanges like Nasdaq and CME is where to find partners. Nasdaq’s last major deal was the 2007 purchase of OMX, a collection of seven Scandinavian exchanges, for $3.7 billion. And CME itself was born of several unions, including that of the Chicago Mercantile Exchange and the Chicago Board of Trade in 2007 and the acquisition of the New York Mercantile Exchange a year later.
Among Nasdaq’s potential merger partners or acquisition targets is CBOE, which would significantly raise its profile in services like options and indexes, according to a research note by Patrick O’Shaughnessy, an analyst at Raymond James.
Analysts also said that BATS, an upstart electronic exchange that has seized a big portion of the domestic equities market, may be a possible target. Nasdaq may also seek to break up the London Stock Exchange’s proposed merger with its Toronto counterpart.
And CME may also seek to grow internationally. The Hong Kong Exchange has signaled its openness to a deal, and other exchanges, including those in Brazil and India, may seek their own tie-ups as well.
India is considered to have potential government opposition to international mergers, similar to the resistance that Australia is providing to the Singapore Stock Exchange bid to buy ASX for $7.9 billion (U.S.)