The London Stock Exchange is buying the Borsa Italiana, the big exchange in that country. The price is $2.2 billion. The goal is to become "the world’s capital market", according to Reuters.
Not likely.
The Nasdaq (NDAQ) still owns a large chunck of the LSE. And the NYSE (NYX) wanted to buy Borsa Italiana. The merger of the two Europe exchanges is simple going to up the bidding from the US. The arms raced between the two big US exchanges should soon line more pockets in Europe.
The LSE is now a more attractive property. Reuters writes "that together they accounted for 48 percent of the FTSE Eurofirst 100 index of companies by market value." It is a large enough operation so that it will not stay independent for long.
It would be a mistake to think that the only bidding for the newly combined European exchanges will come from America. Dubai International Financial Centre has already been mentioned as a possible buyer of LSE. With the new Chinese appetite for buying into things overseas like Blackstone, it is certainly possible that, with government backing, either the Shanghai or Hong Kong exchanges would look at a bid.
Too many buyers and only one exchange for sale?
Douglas A. McIntyre
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