Hong Kong Exchanges & Clearing Bids For London Metal Exchange
The Hong Kong Exchanges & Clearing has signed a framework agreement to buy the London Metal Exchange for $2.15 billion, in the top bid ever for an exchange.
The agreement, signed after the market was closed on Friday, was announced on the 12th anniversary of the exchange.
The transaction is expected to be completed in the fourth quarter of 2012, after the approval from LME shareholders, UK Financial Services Authority and UK Court Sanction.
The deal potentially turns China into a global hub for metals.
[Charles Li, Chief Exec., Hong Kong Exchanges & Clearing]:
"That even though China is such a big consumer, they really do not play as much as a role as they should and they could in the LME market. However, you know, even though LME is 80 percent of the market globally in trading, but it really has a tremendous growth in Asia that has not yet happened."
The addition of a strong commodities component to Hong Kong Exchanges' existing businesses will enhance its growth prospects and diversify its earnings base.
Hong Kong Exchanges was listed in Hong Kong in 2000 and is now one of the world's largest stock exchange owners measured by market value.