(6 April 2011 – Australia) Australia Stock Exchange Ltd (ASX) shares dropped by almost A$1 at the end trading today after Treasurer Wayne Swan notified the Foreign Investment Review Board (FIRB) the merger with the Singapore Exchange (SGX) “should be rejected in the national interest”.The merger plan was unveiled last October and was worth a reported A$8.4 billion and while reported as a merger, was seen by critics to be a takeover by SGX.
It has battled bad reviews, with SGX shares losing ground since the October announcement, however ASX Ltd directors have stated that they would “continue to evaluate strategic growth opportunities” including further talks with SGX on other forms of combination and co-operation.
SGX filed its FIRB application on March 11, and FIRB had 30 days in which to make an initial finding, with the option of asking for another 90, prompting those involved to regard the decision as having a political overtone in emerging so soon.
‘FIRB informed SGX that I had serious concerns about the proposal and that, subject to further consideration, I intended to accept the unanimous FIRB advice that the takeover would not be in the national interest,” Mr Swan said.
The Treasurer has the sole power to veto the deal, which has had trouble attracting political support, under foreign investment rules.
However, Mr Swan said he was still open to further representations on the matter.