Canada to review London-Toronto exchange deal

Mon Feb 14, 2011 4:45pm EST
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By David Ljunggren

OTTAWA (Reuters) - Canada will review the London Stock Exchange's bid to take over the Canadian exchange operator TMX Group, Industry Minister Tony Clement said on Monday.

Under the terms of the Investment Canada Act, Clement has to review any foreign takeover worth more than C$299 million ($302 million). The proposed combined trading venue would have a market value of about $6.9 billion.

"This transaction is in fact subject to review under the Investment Canada Act. The investor has informed me that an application will be filed soon," Clement told reporters in Ottawa.

Clement has 45 days from the moment the review begins to make a decision on whether the deal is of net benefit to Canada. He said he expected that period to begin in one or two weeks.

He can extend that period by a further 30 days, and lawyers have said that scenario is likely.

The exchanges said they can demonstrate that the deal will be good for the country and its markets.

"TMX Group and London Stock Exchange Group have prepared carefully for our work with Industry Canada as they review the merger agreement under the Investment Canada Act," Carolyn Quick, a spokeswoman for TMX, said in an email.

"The companies have worked together to develop a set of undertakings that deliver clear benefits to Canada and Canada's capital markets, while preserving financial regulation in Canada."   Continued...