Singapore Exchange seeks regulatory nod for merger of Australian bourse

Singapore Exchange's mammoth $8 billion merger proposal with Australian Securities Exchange (ASX) Limited yesterday took its first step with the exchange lodging its formal application to the Foreign Investment Review Board.

The board, which is a division of the Treasury, would in 30 days examine whether the proposal was not contrary to the national interest. According to experts, it could take a further 90 days to make a decision, although that was not likely in this case.

The Singapore bourse and the Australian Securities Exchange (ASX) first proposed merger in October to create one of the world's largest and most diversified financial trading hubs.

"The Board of Directors of Singapore Exchange Limited is pleased to announce that it has... lodged a formal application to the Australian Foreign Investment Review Board about the proposed merger of SGX and ASX Limited," the Singapore Exchange said in a statement.

The chief executive of Singapore Exchange Magnus Bocker has been meeting Australian Stock Exchange stakeholders in what he described last week in Singapore as "dozens" of meetings. However, he has left the task of lobbying with Canberra to the junior partner in the merger, ASX.

The financial terms of the deal, announced on 25 October, are the same as a cash-and-shares bid by SGX, although the one-sided nature of the proposed board composition was leveled to some extent on 15 February by the concession that ASX directors would be given five out of 13 seats instead of having three out of 15 seats on the enlarged board.