Briefing

Hong Kong’s stock exchange walks back US$37-billion offer to buy London counterpart

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Hong Kong Exchanges and Clearing, parent company of the Hong Kong exchange, said Tuesday it was “unable to engage” with managers of the London exchange on the proposed merger. Hong Kong presented its bid last month as a way to simplify trading between Asia and Europe and boost China’s participation in the global financial markets. London rejected the unsolicited bid within two days, citing “lack of strategic merit.” Hong Kong had until October 9 to solidify its offer. (Financial Times)

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Talking point: The merger would have created the third-biggest exchange in the world based on the value of listed companies, after the New York Stock Exchange and the Nasdaq. But the offer came with a few sticking points for London: it was conditional on the exchange abandoning plans to buy Refinitiv, a U.S. financial data provider. London also cited concerns with the Hong Kong government’s control over its stock market. The offer came amid strife in Hong Kong stemming from concern around Beijing’s growing influence over the territory. The HKEX said Tuesday it plans to revive the deal in the future, but the merger could face regulatory challenges.