Feds reviewing TMX-LSE merger deal
Posted February 14, 2011 2:01 pm.
This article is more than 5 years old.
Industry Minister Tony Clement is going to review the merger of the operators of the Toronto Stock Exchange and the London Stock Exchange.
The minister made the comment just before question period was to begin Monday in the House of Commons.
The TMX Group and the London Stock Exchange announced a deal last week to merge.
Clement says the review will be under the Investment Canada Act which deals to be a net benefit to Canada.
He said he will consult with the provinces involved with the deal, but he will be ruled by whether the deal is a net benefit to the country.
The minister blocked a hostile takeover of Potash Corp. of Saskatchewan last year because it didn’t meet “net benefit” test.
Ontario Finance Minister Dwight Duncan has said the Toronto Stock Exchange is a strategic asset and decisions about its future must be made in the public interest, not just for shareholders.
A review under the Investment Canada Act is supposed to take 45 days, but the minister has the option to extend that period by 30 days if necessary.
The merger would combine the companies into a new yet-to-be named firm, but each of the 20 exchanges and trading venues the group operate is slated to remain independent and continue to be overseen by existing regulators.
For the LSE, the deal means wider access to North American markets for its clients. It will also give it greater access to derivatives, such as futures trading, markets through the Montreal exchange.
Under the planned merger — which would technically see the LSE buy TMX Group — Toronto will be headquarters for equity listings for the entire group. Montreal will be the hub for derivatives trading, Calgary will be hub for the energy group and Calgary and Vancouver will be headquarters for the junior TSX Venture Exchange.
