18 Sep 2019 Hong Kong Exchanges and Clearing Offer for London Stock Exchange Would Create the World’s Largest Exchange – Burton-Taylor Report

Combined revenue would top USD5 billion; potential acquisition faces significant delays due to regulatory and political hurdles spanning multiple countries and jurisdictions

On September 11 Hong Kong Stock Exchanges and Clearing (HKEX) announced an unsolicited acquisition proposal to the London Stock Exchange Group (LSE) for an estimated $39.4 billion. If the acquisition is completed the combination of HKEX and LSE would become the largest exchange holding company in the world, with total pro-forma revenues exceeding $5.2 billion in 2019, topping the nearest rival (Intercontinental Exchange, $5.1 billion) according to a detailed industry report published today by Burton-Taylor International Consulting (part of TP ICAP group).

The analysis shows:

  • The combination of HKEX and LSE would leapfrog Intercontinental Exchange, CME Group and Deutsche Boerse to become the top revenue-generating exchange group in the world.
  • The acquisition would diversify HKEX revenues away from transaction-based services, putting exchange revenues from information services at $1.3 billion in 2019.
  • HKEX would gain access to a growing stream of revenue from US and EMEA-domiciled clients, resulting in 15.8% and 46.4% of total 2019 revenue being generated from the Americas and EMEA, respectively.

 

“The combination of Hong Kong Exchanges and Clearing and London Stock Exchange Group makes perfect sense from a strategic perspective, however any potential transaction will be fraught with delays as regulators from a multitude of regions and jurisdictions would need to opine favorably on the merits of the transaction,” says David Tabaka, analyst at Burton-Taylor.  “Our analysis shows significant potential synergies between the two exchange giants, but the reality is that there is little chance this transaction will gain the regulatory and political approvals necessary to consummate the acquisition.”

The 29 page Company Focus – Hong Kong Exchanges and Clearing and the Proposed Acquisition of the London Stock Exchange Group report may be purchased by visiting  https://burton-taylor.com/hkex-lse-proposed-combination/ or by contacting orders@burton-taylor.com, +1 646 201-4152.

 

Media Contacts

Douglas B Taylor, questions@burton-taylor.com+1 646 201-4152

About Burton-Taylor International Consulting

Burton-Taylor International Consulting, part of TP ICAP group, is a recognized leader in information industry market research, strategy and business consulting.  Burton-Taylor Exchange, Credit, Risk, Compliance, Media Intelligence, PR and Market Data share figures are regarded as industry standard globally. Burton-Taylor clients command an estimated 80% share of global revenue in the Market Data space and include the world’s largest information companies and exchange groups, key government organizations and regulatory bodies on multiple continents, the largest advisory firms serving the industry and more than 30 of the most active private equity and investment companies around the world.

About TP ICAP

TP ICAP brings together buyers and sellers in global financial, energy and commodities markets. It is the world’s largest wholesale market intermediary, with a portfolio of businesses that provide broking services, data & analytics and market intelligence, trusted by clients around the world. We operate from offices in 31 countries, supporting award-winning brokers with market-leading technology.  For further information see www.tpicap.com.