Too close to call – er maybe not then – 30 June 2011
First Published Thursday, 30th June 2011 02:39 pm from Fidessa : Steve Grob
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So the LSE/TMX deal is no more - it is deceased, it is
an ex deal. Last night the href="http://www.londonstockexchange.com/home/homepage.htm"
target="_blank">LSE broke off talks with Canada's
group as it became obvious that their proposed merger was never
going to get the required support of href="http://www.tmx.com/" target="_blank">TMX
shareholders. So, if you include recent events in
Australia, the latest score is National Self Interest 2
- Common Sense nil. So, what now - is the LSE pining
for another deal and will the Maple Group bid go ahead or will it
be left to expire (arguably having done its job)? And, what are
the implications for BATS/Chi-X and the NYSE Euronext/Deutsche
Börse - will their merger deals be left pushing up the
daisies too?
It's interesting that in both
cases the management behind the exchanges being "acquired" were
100% behind getting together with a bigger partner so as to
achieve operational scale and global reach. This tells you that
they understand that, in the exchange world, you simply cannot
hold back the tide of globalization, and so it would seem
inevitable that they and other national stock exchanges will end
up doing deals of some sort or another (and maybe on less
favourable terms). As for href="http://www.euronext.com/landing/indexMarket-18812-EN.html"
target="_blank">NYSE Euronext and href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/home"
target="_blank">Deutsche Börse - it's
significant that there has been barely a mutter of nationalistic
outcry on either side of the Atlantic. Maybe they get it
- and, more importantly, see the potential in being the
first exchange group to achieve real global operating
scale.
For the LSE it's not a
question of it "being in play" but that it simply has to get
bigger and quickly. Given its ambitions in the derivatives arena,
maybe Xavier will be booking flights to Chicago in the not too
target="_blank">CME has been pretty quiet on the
merger front since it swallowed its neighbour and arch rival on
LaSalle Street - the CBOT. A tie up between the two would create
some interesting multi-asset and operational synergies,
especially in global clearing and transatlantic
trading.
Whatever happens, those exchanges (or
their shareholders) that continue to nail their strategy to the
perch of nationalism may find that they get left behind and end
up scrabbling for partners when all the juicy deals have
gone.
