Wednesday, February 16, 2011

ASX, SGX Strengthen Merger Proposal with New Arrangements

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

ASX-SGX board.

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.”

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