LONDON: The London and Toronto stock exchanges announced a landmark merger Wednesday to create a one of the world's biggest trading platforms that will dominate raw materials and energy. "London Stock Exchange Group plc and TMX Group Inc. today announced an agreement to combine Europe's and Canada's leading diversified exchange groups in an all-share merger of equals," the pair said in a joint statement. "The merger will create a world-leading organization and is unanimously being recommended by the boards of both LSE and TMX." The transaction was billed as a merger of equals, but LSE investors will hold the upper hand with 55 percent of the new group, while TMX shareholders will have 45 percent. Both exchanges retain their existing brand names. The company, which will span 20 trading markets and platforms across Europe and North America, will be well-placed to tap into the booming commodities sector at a time of rocketing prices for commodities like copper and crude oil. The enlarged group, which will be jointly headquartered in London and Toronto, will have a combined market capitalization of almost $7.0 billion (5.1 billion euros). The LSE Group's chief executive, Frenchman Xavier Rolet, will take up the same role at the new group, while TMX boss Thomas Kloet will become president. "This is an incredibly exciting merger with considerable growth opportunities," said Rolet in the statement. "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," added Rolet, who became LSE boss in 2009. The group, provisionally called LSEG-TMX, will be the world's largest exchange in terms of the number of companies traded, with a total of more than 6,700 listings. And it will also become the number one venue for international listings from emerging and growth markets, according to the statement. "We are creating an international group with deep expertise, undeniable leadership in key sectors and the ability to compete and win on the global stage," added TMX Chief Executive Kloet. "Canadian customers will benefit from access to one of the world's deepest capital pools while European issuers will have an effective gateway to North American financial markets." The deal is expected to be completed in the second half of this year, subject to shareholder and regulatory approvals. TMX Group operates the Toronto Stock Exchange, the Montreal Stock Exchange and the Calgary-based TSX Venture Exchange. Following news of the merger, the LSE's share price soared by 8.18 percent to 965 pence in morning London deals, as investors welcomed the development. "I believe the merger is a plus for the LSE - it is more complementary than some of the other deals that the LSE was pursuing," said ETX Capital trader Manoj Ladwa. "The LSE has lost its way for a long while - losing market share to rivals Deutsche Boerse and Euronext. "I feel the tie up with TMX will reaffirm the LSE's place as a leading global exchange once again." Under Rolet's predecessor, Clara Furse, the London Stock Exchange merged with Borsa Italiana in late 2007. And in a bid to remain competitive, the LSE attracted major investment from Dubai and Qatar. Deutsche Boerse has failed three times to buy the LSE - firstly in 1998, then in 2000 and also in 2005 - as it sought to keep ahead of arch-rival Euronext, which operates the Paris, Amsterdam, Brussels and Lisbon exchanges. – Agence France
