TSX Group to Buy Montreal Exchange

TSX Group, which owns the Toronto Stock Exchange, is buying the Montreal Exchange for about C$1.3 billion. The merged entity will be known as TMX Group. “Today, we are building a made-in-Canada exchange,” said Richard Nesbitt, chief executive officer of the TSX Group Inc. The deal makes both stronger.

The press release announcing the deal said, “Customers in Canada and internationally will benefit from increased liquidity levels, accelerated product development, a fully diversified product suite, and superior technology.” The company believes that there are some C$25 million in savings as it streamlines operations.

As with anything in Canada, there are some features to the deal that take into account local feelings among the francophone community. TMX Group's head office will stay in Toronto, but Montreal will remain the site for all derivative trading. TMX will have an 18-member board of directors, 25 per cent of whom must be Quebec residents.

The Montreal Exchange already has a piece of American business through its 31.4% ownership of the Boston Options Exchange. There are other exchanges thought to be in TMX’s sights, especially in the US.

But there’s little chance that another exchange will buy up TMX. According to The Globe and Mail, “No single shareholder will be allowed to own more than 10 per cent of the combined TMX group, unless amendments to this restriction are approved by both the Ontario Securities Commission and Quebec's Autorité des Marchés Financiers (AMF).”

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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