Combining London Stock Exchange with that of Hong Kong can pave the path to become the largest financial center in Europe and Asia. It may turn true in the future, but probably not. A statement from the main exchange of Hong Kong reveals the prospect.
Shares of the LSE Group jumped by 15 percent with the news that the HK exchange is making a 32 billion bid to acquire the LSE. However, the excitement was short-lived as it wants the rival exchange to drop plans of buying the Refinitiv data firm.
Hong Kong company's chief Charles Li said the proposed deal would redefine the capital markets of the world and the two exchanges together can connect both West and East abreast of providing greater innovations, trading opportunities and risk management to the customers.
Meanwhile, the offer has been confirmed by the LSE, but it is unsolicited as well as highly conditional. The rise in share prices and thereafter a drop gestures the investors are not expecting the deal to get implemented.
Apart from these, it is irrational for the UK government to witness such a deal as the LSE is a key symbol of the country's financial services and simultaneously the Chinese government may overtake it through back door.
The exchange said they are committed to the proposed 22 billion pound deal with Refinitiv and acquire it from Blackstone equity house and Thomson , the two owners of the firm.
Earlier, in 2017, the European Union objected to the proposed merger of Germany's Deutsche Boerse with the LSE for 20 billion pounds citing it would lead to a de facto monopoly.
LSE was founded in 1801 and its current market value is about 3.9 trillion pounds. It is located in Paternoster Square, City of London, United Kingdom. It is a part of the LSE Group since 2007. The key people currently handling the exchange include chairman Don Robert and CEO Davi Schwimmer.