Australia rejected the Singapore stock exchange's $8.3 billion takeover bid for the Australian stock market operator on Friday, with the federal treasurer saying the merger would not be in the nation's interest.
The decision was expected, with Treasurer Wayne Swan signaling earlier in the week that Australia was planning to scuttle Singapore's cash and shares offer for the Australian Securities Exchange Ltd., known as ASX. The proposal, announced in October, would have created one of Asia's leading stock markets.
"My decision to disallow the proposal was based on clear, unambiguous and unanimous advice from the Foreign Investment Review Board that this takeover would be contrary to out national interest," said Swan, who has veto powers on major foreign investments in Australia.
The proposal had faced opposition from key lawmakers in Australia, who raised concerns about Singapore's human rights record and whether Australia would actually benefit from a combined stock exchange company headquartered overseas.
"Let's be clear here: This is not a merger. It's a takeover that would see Australia's financial sector become a subsidiary to a competitor in Asia," Swan told reporters in Canberra.
The two companies had hoped the deal would help them compete as larger global exchanges join forces.
Nasdaq OMX Group Inc. and another U.S.-based market, the IntercontinentalExchange Inc., have made a joint $11.3 billion bid for NYSE Euronext, the parent company of the New York Stock Exchange. That could lead to a bidding war with Deutsche Boerse, which agreed a $10 billion deal with NYSE in February. And London Stock Exchange Group Plc plans to purchase Canada's exchange operator TMX Group Inc.
"The ASX Board reiterates its ongoing belief in the need for ASX participation in regional and global exchange consolidation," ASX said in a statement. "ASX will continue to evaluate strategic growth opportunities, including further dialogue with SGX on other forms of combination and cooperation."