The London Stock Exchange on Friday rejected an unsolicited $37 billion takeover offer from its Hong Kong counterpart, saying that Hong Kong officials’ assertion that finalizing the deal would be swift and certain was “simply not credible.”
London officials said in a letter to the Hong Kong Stock Exchange that they had fundamental concerns about the proposal, adding that the Hong Kong exchange’s relationship with the territorial government there would “complicate matters.”
“The board unanimously rejects the conditional proposal and, given its fundamental flaws, sees no merit in further engagement,” the London exchange said in a statement.
Stock exchanges have become national symbols of capitalistic clout, and a combination of two would create a juggernaut to rival the leading US exchanges. The proposed Hong Kong takeover was the latest move in a decadelong push to consolidate stock exchanges around the world, as new technology threatens to render traditional exchanges obsolete.
The Hong Kong and London exchanges have both sought merger partners before. London officials last month agreed to buy data provider Refinitiv for $27 billion.
In making their offer Wednesday, Hong Kong officials said that fusing the two exchanges would allow companies and investors to profit from a common platform for trading stocks and bonds that would be open 18 hours a day.
But the proposal coincided with intense turmoil in Britain and Hong Kong that has jeopardized their standings as regional financial hubs.