SYDNEY: The Australian and Singapore bourses revamped their merger proposal yesterday, promising an equal number of directors from each country in a bid to overcome objections to the multimillion dollar deal.
The two stock exchanges also pledged to maintain operations, assets and key staff in Australia, and to invest in new products. The deal has prompted concerns over foreign ownership and Singapore's democracy and rights record.
"The changes and commitments announced today, combined with existing regulatory protections, strengthen our belief that the ASX-SGX merger proposal is in the best interest of shareholders and in the national interest of Australia," ASX chairman David Gonski said.
SGX chairman Chew Soon Seng will head the new-look board, which has been cut to 13 and will include five Singaporeans and five Australians. It will also have three international directors, including CEO-designate Magnus Bocker.
"These commitments demonstrate the SGX's belief in the merits and benefits of the merger, address concerns that have been expressed, and provide further clarity as to how the merged entity will operate in the future," Chew said.
The ASX and SGX announced plans in October for a merger that would create one of the world's largest and most diversified financial trading hubs.
The plans come as several global bourses recently announced moves to tie up.
Last week German exchange operator Deutsche Boerse and NYSE Euronext said they were planning a deal that would see the world's biggest bourse, while London and Toronto said they were planning a merger.
London's index is already part owned by Wall Street's Nasdaq.
The deal will be reviewed by Australia's securities and foreign investment watchdogs, as well as the central bank, and must be approved by Treasurer Wayne Swan. Parliament will also have to allow a change in the ASX's ownership laws.
Analysts believe sticking points may include the Singapore government's large stake in SGX. Concerns had also been raised by the board's composition, which was originally planned to include 11 Singaporeans and four Australians.
The merger has already been approved by Australia's competition body, and has been broadly welcomed by Swan. But parliamentary approval could prove tricky for the government, which has just a one-seat lower-house majority.
Greens leader Bob Brown, whose party props up the Labor government in the lower House of Representatives, is a vocal critic, while key cross-bench MPs have also expressed their opposition.
"This (Singapore) is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse," Brown said in October, when the deal was announced.
But ASX chief executive Robert Elstone has vehemently denied the merger is against Australia's national interest, arguing that it will give Australian companies and investors greater access to Asian capital and opportunities.
Analysts say the row echoes emotional debate over SingTel's 2001 takeover of Optus, Australia's second-largest telecom company, which raised national security fears but was ultimately approved.
Under the revamped proposal, all of ASX's physical assets, including trade clearing and settlement would stay in Australia, along with senior management. - AFP
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