CME Not Looking to Compete With HKEX to Acquire LSE

The exchange operator is currently focused on integrating NEX into its operations.

It looks like Hong Kong Exchanges and Clearing (HKEX) will not have to compete with a counteroffer from CME Group Inc, the largest futures exchange operator in the United States, to acquire the London Stock Exchange (LSE), according to a report from Reuters.

On Wednesday, the Chief Executive Officer (CEO) of CME Group, Terry Duffy, said in an interview that the firm is not currently considering to challenge HKEX’s $39.6 billion bid to take over the LSE.

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CME is focused on NEX integration

This is because the exchange operator is currently “laser-focused” with completing the integration of its recent acquisition of NEX Group Plc, and growing its core franchise, the CEO said.

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Furthermore, Duffy also said that he was not surprised by HKEX’s interest in the LSE, which, as Finance Magnates reported, is currently in the process of acquiring data company Refinitiv in an all-share transaction for around $27 billion.

However, the CEO of CME Group did say the premium for the British bourse was getting quite high: “It’s really a bet-the-franchise type of transaction and so you have to say to yourself, ‘well, who else could possibly get in there who’s got that kind of fire-power without betting the franchise’ and I don’t know anybody that does.”

Details on HKEX acquisition of LSE

Yesterday, Finance Magnates broke the news that HKEX made an unsolicited offer of £32 billion ($39.6 million) for the company. In the statement, the Hong Kong group said that it was in talks with regulators as well as officials at the London Stock Exchange Group (LSEG), as to how the company would be structured if the acquisition does come to pass.

If HKEX was to takeover LSE, it expects existing LSEG management to remain in place. Furthermore, the company believes the acquisition will be mutually beneficial, with LSEG gaining better access to the Chinese market and HKEX being able to use the British exchange’s trading and clearing technology.

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