Singapore's SGX agrees $8.3 billion buy of Australia's ASX

Singapore Exchange (SGX) unveiled an agreed A$8.4 billion ($8.3 billion) takeover offer for Sydney-based ASX Ltd on Monday to create the fifth-largest listed exchange in the world.                 
 

The merger of SGX and the ASX, Asia's second and third largest listed bourses respectively, aims to ward off the threat of alternative trading systems, line up new avenues for growth and cut costs.                                           
 

The deal marks the first major consolidation of Asia-Pacific exchanges and will result in $30 million in cost savings.         
 

"The offer is not near ASX's all-time high, but it is certainly great," said Mark Daniels, head of Australian equities at Aberdeen Asset Management, which owns ASX shares.                                            

SGX offered a combination of A$22.00 in cash plus 3.473 of its own shares for each ASX share. It said in a joint statement with the ASX on Monday that the offer valued ASX shares at A$48.00 each, a 37% premium to ASX's last trade.                                           

Shares in ASX spiked 25% to A$43.50 after it resumed trade, still well short of a record high of A$61 in early 2008.

SGX shares fell as much as 6.7% but quickly pared losses to trade down 1.8% at S$9.40.

"This will be a highly competitive exchange group in an increasingly globalised world," SGX chairman JY Pillay said in a statement.