The Japan Fair Trade Commission (JFTC) has approved the merger of the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE), clearing the way for an agreement reached between the two firms in November.
Japans Anti-Monopoly Act required the deal to by audited by the JFTC, a process that has been ongoing since the companies filed a notification in January.
The TSE plans to buy between 50% and two-thirds of the OSEs shares for 480,000 per share, valuing the exchange at 130 billion ($1.6 billion), according to the November merger agreement. The new entity will be called Japan Exchange Group and would cement the Tokyo exchanges place as the worlds third largest equity exchange.
However, sources cited by Reuters say the OSE has been undervalued and raise doubt that shareholders will tender their shares, thereby preventing the merger. Overseas investors hold 64% of the OSEs shares, according to Reuters.
If the TSE cannot acquire more than 50.1% of the OSEs shares, no shares will be purchased, the agreement says. Following that, a two-thirds shareholder approval would also be required.
The vote, pending completion of the tender offer, is scheduled for the fall, and the scheduled date for the merger itself is Jan. 1, 2013.
We will continue working toward the business combination to strengthen our presence as a global financial center, increase convenience for market users, and also contribute to raising the competitiveness of the Japanese financial and capital market in our efforts to revitalize the Japanese economy, Atsushi Saito, president and CEO of the TSE, said in a statement.
(OS)