Today, in a forlorn statement, the SGX said, “the parties have agreed to mutually terminate the merger implementation agreement entered into on October 25, 2010.” No revisions to the bid, then: it’s over. That the SGX won’t try again reflects the fact that the bid was rejected because of something it could do absolutely nothing about: Australian political sensitivity. Partly this was about the tricky question of Australian national interest – always a nebulous concept – and partly about timing. There could hardly have been a worse moment to get a politically dicey development through an Australian parliament. The government has no majority; it is only in office at all because of the assistance of a couple of independent parliamentarians who must be kept happy. In such circumstances, nobody was going to expend the political capital required in order to change the law and allow the national stock exchange to be taken over by a foreigner. Who gets re-elected on a platform like that?
The odd thing is that everyone seemed to know all this from the start. Magnus Bocker, chief executive of the SGX – who has completed more exchange mergers than anyone – built his pitch from the outset on efficiencies, logic, technology, liquidity; the nuts and bolts of an exchange merger in a new world of capital flows.
