ASX defends logic of SGX merger

ASX defends logic of SGX merger

ASX Limited (ASX:ASX) has defended its decision to pursue a merger with the Singapore exchange (SGX) in the face of opposition to the deal.

In an update to investors, ASX Limited said the ASX board still believes in the need to participate in a global exchange consolidation.

The recent merger announcements by the London and Toronto exchanges as well as NYSE Euronext and Deutsche Borse underscore this importance, ASX said.

The board also believes in the business logic of merging with SGX in particular, the update added.

The deal, which is currently under review by the Foreign Investment Review Board (FIRB), has met with resistance from the Coalition, including shadow treasurer Joe Hockey. But the party has yet to formally oppose the deal.

After the FIRB completes its review, the deal also must be signed off on by treasurer Wayne Swan.

SGX last month ceded to pressure to alter the deal to allow the appointment of an equal number of Australian and Singaporean directors on the converged company's board. Under the new proposal, the 13-member board will also have three international members.

The merger was first mooted in October. At the time, the companies said the combined market cap of the converged entity would be US$14 billion ($13.82 billion).

ASX shares grew 0.23% during Thursday's trading to $34.610.

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Tags Mergers and acquisitionsASXjoe hockeyWayne SwanFIRBASX:ASXSingapore Stock Exchange

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