Search

IN FOCUS
MARKETS & INVESTING | Staff Reporter, Hong Kong
Published: 18 Jun 12
273 views


HKEx buys the London Metal Exchange

A historic deal will see Hong Kong Exchanges and Clearing Ltd attain a long-sought aim of diversifying into commodities.

HKEx on June 15 agreed to pay 1.4 billion pounds (US$2.15 billion) to buy the London Metal Exchange (LME), the world's largest market in options and futures contracts on base and other metals. The deal will be the first overseas acquisition for HKEx.

It gives the Hong Kong Stock Exchange, Asia's largest bourse, a much needed entry into a commodity trading platform. It also brings LME members closer to China, the world's biggest metals buyer.

The offer must now be approved by the LME board. Completion of the deal is expected by the fourth quarter of this year.

HKEx will finance its acquisition of LME through existing funds and with a 1.1 billion pound bank loan. The deal will help HKEx maximise commodity trading opportunities across Asia. The bourse has previously been mostly geared towards equity markets.

HKEx CEO Charles Li said his company believes the combination will allow the LME and its members to significantly increase trading volumes through improved access to China, and form the foundation for the growth of its commodities platform.

HKEx, the world's second-most valuable stock exchange, said the acquisition will add to its earnings from the third year after completion.

HKEx competed with several exchanges to win the auction, including the InterContinental Exchange, a U.S. commodities exchange. HKEx had previously ignored a wave of consolidation among exchanges early last year.

In 2011, LME reported a 19% fall in net income to 7.68 million pounds even as revenue rose 21% to 61.2 million pounds.

LME offers futures and options contracts for aluminum, aluminum alloy, NASAAC (North American Special Aluminum Alloy), cobalt, copper, lead, molybdenum, nickel, steel billet, tin and zinc.



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

Tags: Hong Kong Exchanges and Clearing Ltd, London Metal Exchange

LATEST MARKETS & INVESTING JOBS »
PRINT ISSUE »

Subscribe Now
HK recruitment market gets more competitive than ever

2 views

The power of multi channel marketing

3 views

Hong Kong venture capital funds: The future of startups?

3 views

MOST READ EXCLUSIVES

Here's how a startup aims to market ‘kezhans’ digitally

Here\'s how a startup aims to market ‘kezhans’ digitally

This company has built SaaS digital marketing systems for boutique hotels.

by STAFF REPORTER
9 Jun 2015 | 654 views
 

A room for video games at GoAnimate’s new office

A room for video games at GoAnimate’s new office

Check out the interior photos.

by STAFF REPORTER
9 Jun 2015 | 562 views

Le Slip Francais brings its fun and authentic French brand in Asia

Le Slip Francais brings its fun and authentic French brand in Asia

And Hong Kong is its new home.

by STAFF REPORTER
16 Jun 2015 | 367 views
 
close Don't Show Again

STAY INFORMED! Get our free weekly newsletter