The Hong Kong Stock Exchange is one of the most famous and at the same time, important stock exchanges in the world. It is the third-largest in terms of market capitalization in Asia. Moreover, the Hong Kong Stock Exchange is the fifth-biggest stock exchange in the world. It means that this stock exchange plays a vital role in the global economy.
It is worth mentioning that it is one of the oldest stock exchanges. The Hong Kong Stock Exchange dates back to the 19th century. The Hang Seng Index is used to measure the overall market performance in Hong Kong.
Hong Kong and London stock exchanges
Hong Kong Stock Exchange has ambitious plans for the future. On Wednesday, the owner of the stock which is Hong Kong Exchanges and Clearing Limited (HKEX) announced a bid to buy the London Stock Exchange. The government of Hong Kong is the largest shareholder in HKEX. It has the right to appoint the six directors of the board, out of total 13.
According to this statement, HKEX would like to combine the two companies. The price of the deal is more than $30 billion, more precisely $36 billion. The CEO of HKEX Charles Li said that it in the interests of shareholders, investors, and others to complete this deal.
The combined value of these two stock exchanges will be $70 billion based on the information provided by HKEX. The Hong Kong Stock Exchange offered to pay 8,361 pence per London Stock Exchange Group (LSEG) share. It means that HKEX is ready to pay a 23% premium for LSEG shares. HKEX is going to pay with cash as well as shares. Based on this statement, HKEX is going to pay 2.497 pence newly issued HKEX shares as well as 2,045 pence in cash for each LSEG share. It means that the total value will reach $36.6 billion.
The London Stock Exchange Group which owns the London Stock Exchange, responded to this offer. The LSEG said it would consider this proposal and will release its response.
The successful competition of this deal will be a big success for the Hong Kong Stock Exchange.