UK regulator approves LME purchase

Final LME takeover expected December 6.

The United Kingdom’s Financial Services Authority has approved the US$2.2 billion purchase of the London Metal Exchange by Hong Kong Exchanges and Clearing Ltd. FSE is responsible for the regulation of the financial services industry in the UK.

The approval means HKEx has only to take two more steps to close the transaction: a court hearing to approve the deal and confirm capital reduction on December 5, after which it would become unconditional and take effect the next day.

In July, LME shareholders approved their company’s takeover by HKEx. The vote to approve paved the way for HKEx to take over ownership of the world’s leading commodity exchange. It saw 99.24% of shareholder in favor, said LME. The proposal needed the support of more than 50% of shareholders and owners controlling at least 75% of the stock.

LME handles over 80% of the world's trade in industrial-metal futures and sets global prices for metals, including copper, aluminum and nickel. LME handled a record US$15 trillion in contracts last year.

It is the first overseas acquisition for HKEx, the world's second-biggest exchange by market value, and its first contracts in commodities. LME members may get more access to China, which consumes more metals than any other nation.