Singapore and Australian exchanges unveil giant merger

The Singapore stock exchange is planning a £5.3bn takeover of its Australian counterpart in a deal which would create the world's fifth largest listed bourse.

Singapore's SGX and Australia's ASX plan to form ASX-SGX, with both exchanges to keep their respective brands.

The cash and shares offer values the ASX at A$48 a share, or A$8.4bn, a premium of more than 37% on its last traded price. The pro forma market capitalisation of the combined group was approximately US$12.3bn as at 22 October.

"In a period of profound structural change in financial markets, ASX has carefully considered its strategic options to enhance its future competitiveness," ASX CEO and managing director Robert Elstone says.

"This combination delivers tangible value today and presents the opportunity for shareholders, customers, employees and other stakeholders to participate in the growth options that this broader based exchange group can make available in the future, whilst preserving strong governance and regulatory oversight in Australia."

The proposed combination expected to be implemented during the second quarter of 2011.