Australia’s ASX Limited (ASX) and Singapore Exchange Limited (SGX)
have agreed to adjust their merger proposal as they seek to overcome
political obstacles that stand in the way of the major deal.
In a joint statement posted Tuesday on ASX’s website, both sides promised
an equal number of directors from each country on the proposed
Chew Choon Seng, SGX’s chairman, will head the combined board,
which has been cut to 13 members. Of these, Australian and Singaporean
citizens will account for five members each respectively. The board
will also include three international directors, including ASX-SGX
Managing Director and CEO-designate Magnus Bocker.
All physical assets required for the operation of ASX’s businesses,
including listing, trade execution, clearing and settlement, and all
dedicated data and data recovery centres will continue to be developed
and located in Australia.
Both sides also pledged to build centres of excellence in Australia and
Singapore to drive product innovation, leverage on relationships with
intermediaries and liquidity providers, and develop new international
products and services to be distributed to the Asia-Pacific marketplace.
“These commitments demonstrate SGX’s belief in the merits and
benefits of the merger, address concerns that have been expressed,
and provide further clarity as to how the merged entity will operate in the
future to create growth and deliver value for shareholders and all stakeholders,”
SGX’s Chew said.
David Gonski, current chairman of ASX, will be the combined group’s
deputy chairman, as well as Chair of the ASX-SGX Integration Committee
tasked with overseeing a successful merger.
“The changes and commitments announced today, combined with
existing regulatory protections, strengthen our belief that the ASX-SGX
merger proposal is in the best interests of shareholders and in the
national interest of Australia,” ASX’s Gonski said.
In October last year, ASX and SGX announced plans for a merger that
would form one of the world’s largest listed exchange group with a broad
international shareholder base.
SGX’s CEO Magnus Bocker said Tuesday that both exchanges expect
to submit their revised merger proposal with Australia’s Foreign Investment
Review Board (FIRB) in the “next few weeks.”