Australia’s Treasurer Dismisses Reports on Possible Veto of ASX-SGX Merger

Australia’s Treasurer Wayne Swan on Monday dismissed reports that

the proposed A$8.4-billion (about S$10.6 billion) merger between the

Australian Securities Exchange (ASX) and Singapore Exchange (SGX)

is likely to be rejected.

In October last year, ASX and SGX announced plans to create one of

the world’s largest listed exchange groups with a broad international

shareholder base.
 
However, the proposal has faced political obstacles in Australia

due to concerns over issues such as the extent of foreign ownership.

The Australian Financial Review cited government sources on

Monday predicting the deal would not pass through parliament

after the proposal was submitted to Australia’s Foreign Investment

Review Board (FIRB) on March 11.

However, Swan dismissed such reports, telling ABC Radio he

had “no idea” where they came from.

He was quoted as saying that his decision would be based on

the FIRB’s recommendation, a thorough consideration of all

issues concerned, and national interest.

A key issue is whether to lift the 15-per cent cap on foreign

ownership for ASX.

In a bid to overcome the political obstacles, the exchanges

adjusted their merger proposal last month, promising an equal

number of directors from each country on the proposed ASXSGX

board.

Additionally, both sides pledged that all physical assets required

for the operation of ASX’s businesses would continue to be

developed and located in Australia. They also agreed to develop

new products.