London Stock Exchange Group plc (LSEG) and TMX Group Inc. (TMX) have merged.
The combined transatlantic group (LSEG-TMX) will be jointly headquartered in London and Toronto and will offer an international gateway, global pools of capital formation and liquidity together with a portfolio of complementary markets, products, technologies and services, the combined group said in a statement.
The boards of LSEG and TMX believe that the merger is strategically compelling and will create a more diversified business with greater scale, scope, reach and efficiencies, generating substantial benefits for all stakeholders.
The benefits, according to the group, include: a top global listing hub; breadth of markets, together with 20 trading platforms across North America and Europe; information and technology expertise; and savings by cost synergies.
“We are today announcing the creation of a global leader in the exchange space, says Chris Gibson-Smith, chairman of London Stock Exchange Group plc. Building on our own shared long histories of excellence in capital markets, financial strength and cultures of internationally respected governance, I believe that together we will be able to offer shareholders and customers a business significantly greater than the sum of our parts. This merger comes at a hugely important time in the history of capital markets.”Wayne Fox, chairman of TMX Group Inc. adds: “Two highly successful and profitable institutions are joining forces to create a more diversified and international company. This merger of equals will benefit shareholders, issuers, customers, employees and other stakeholders of both organizations. As important, it will have a positive impact on the business communities in Canada, the UK and Italy. I look forward to working with my fellow directors and the combined team to create one of the world’s leading exchange groups.”
The Board of the merged group will consist of 15 directors, eight to be nominated by LSEG (of which it is envisaged three will be from Borsa Italiana), and seven to be nominated by TMX. Wayne Fox will be the non-executive chairman of the board, and Chris Gibson-Smith and Paolo Scaroni will be deputy chairmen. Gibson-Smith remains chairman of London Stock Exchange plc.
The executive Board members of LSEG-TMX will be:CEO – Xavier Rolet, CEO of LSEG (based in London)President – Thomas Kloet, CEO of TMX (based in Toronto)CFO – Michael Ptasznik, CFO of TMX (based in Toronto)Director – Raffaele Jerusalmi, CEO of Borsa Italiana (based in Milan)
Under the terms of the Merger Agreement, TMX shareholders will receive 2.9963 LSEG ordinary shares for each TMX share. LSEG shareholders will therefore own 55% and TMX shareholders will own 45% of the enlarged share capital of LSEG, the holding company of the merged group, which will be renamed after closing. The merged group will be listed on both the London Stock Exchange and the Toronto Stock Exchange. The various operating exchanges in the Merged Group will continue under their existing recognized brand names.
Completion of the merger is subject to customary regulatory and other approvals, including approval by LSEG and TMX shareholders and court approval in Ontario.