CEOs favour merger of Toronto, London bourses

Toronto, April 4 - Amid the continuing uncertainty over the proposed merger of the Toronto Stock Exchange with the London Stock Exchange, a majority of CEOs here say they support the merger.

The Toronto Stock Exchange, the third largest in North America, and the London Stock Exchange announced February 9 to merge to create a new global mega-bourse.

The 150-year-old Toronto Stock Exchange is the biggest resource (energy and mining) leader, with about 1,500 companies listed on it.

The current market value of the London Stock Exchange (LSE) is about $3.87 billion whereas the TMX Group is pegged at $2.99 billion.

With their merger, the two bourses will form a nearly $7-billion giant entity with offices in Toronto and London.

But the merger is under review by the Canadian government to ensure that it will not negatively impact the country's financial sector or dilute Toronto's importance as a major market and banking centre in North America.

The country's top banks and mining bosses are also divided over the deal. But a majority of Ontario chief executives want the deal to go through.

In a poll commissioned by the TMX Group, which operates the Toronto Stock Exchange, most CEOs said the government should give the nod to the merger.

The survey asked the CEOs: "Based on what you know so far, would you say that you support, oppose, or have no opinion about the proposed merger?''

While 52 percent said they 'strongly support' or 'somewhat support' the merger, only 38 percent said they 'somewhat oppose' it or 'strongly oppose' it. About 10 per cent were unconcerned.

Further, 42 percent CEOs saw 'somewhat' or 'very positive' benefits of the merger for Canada. Only 18 per cent saw 'somewhat' or 'very negative' impact of the merger.

A PricewaterhouseCoopers survey last month found Canada's mining CEOs divided in their endorsement of the TMX Group's argument that the merger will turn the Toronto Stock Exchange into a global resource hub.

The country's top banks are also divided over the merger. While the Royal Bank of Canada - the top bank of the nation - and Bank of Montreal support the merger, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and National Bank of Canada support it.

"The proposed merger has rekindled debate over shielding Canadian companies from foreign takeovers and has protectionists squared off against free-market proponents,'' says the Globe and Mail newspaper. (IANS)

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