Toronto, Feb 12 (IANS) The proposed merger of the Toronto Stock Exchange (TSE) with the London Stock Exchange (LSE) may not have smooth sailing as the Canadian and Ontario provincial governments say they will closely vet the issue in national interest.
The TMX Group, which operates the stock exchanges in Toronto and Montreal, said Tuesday that “it is in advanced discussions with London Stock Exchange Group regarding a possible merger of equals to create an international exchange leader.”
On merger, the two bourses will form a nearly $7-billion giant entity with offices in Toronto and London.
But Canadian prime minister Stephen Harper, whose Conservative government last year blocked the $38.6-billion takeover of the country’s PotashCorp by the Australian mining giant BHP Billiton, has already said that corporate consolidations of this magnitude automatically come under review as per Investment Canada Act rules.
Industry Minister Tony Clement has also said the government will review the merger to see whether it benefits Canada.
“The first stage in these types of transactions is to determine whether the provisions of the Investment Canada Act actually apply to the transaction and if the answer is yes, then obviously myself and my officials will review the transaction within the 45-day period,” according to the industry minister.
Dwight Duncan, finance minister of Ontario province where the Toronto Stock Exchange lies, Friday declared that the TSE is a strategic asset.
Any decision about the future of the TSE should be made after taking public interest into consideration, not just shareholder interests, he said.
“I guess when you announce something like this … on what I would call a strategically important industry to this country’s largest city and largest province, not to mention its impact on Quebec and British Columbia, of course there are political considerations,” the provincial industry minister was quoted as saying by the Canadian Press.
The 150-year-old Toronto Stock Exchange is the biggest resource (energy and mining) leader, with about 1,500 companies listed on the bourse.