The London Stock Exchange (LSE) and TMX Group, which operates Toronto Stock Exchange (TSX), have agreed to merge.
The deal – which is subject to approval from shareholders – will create the largest exchange group in the world for resources companies.
After the merger, the combined group will also be the number one listing venue for growth companies. LSE’s Alternative Investment Market and the TSX Venture Exchange together have around 3,600 companies.
In total, the new group will have more listings than any other exchange group, but in terms of the market capitalization of its companies it will rank only seventh in the world.
Issuers will benefit from the increased capital pool, potential for cross-listings and improved access to investment expertise, say the two firms in a statement.
Xavier Rolet, the LSE’s chief executive, will become CEO of the combined group, while TMX boss Thomas Kloet will become president.
‘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,’ says Rolet in the statement.
Under the all-share deal, LSE shareholders will own 55 percent of the new group, TMX Group shareholders 45 percent. The agreement is subject to approval by both groups of shareholders.
The move is the latest round of global consolidation in the exchange industry. In October last year, the Australian Stock Exchange announced a merger with Singapore Exchange.
Other global mergers include NASDAQ’s acquisition of Nordic Exchange Group and NYSE’s tie-up with Euronext, both of which took place in 2007.
In its time, the LSE has fought off takeover attempts by NASDAQ and Deutsche Borse.
