Hong Kong Exchanges and Clearing (HKEX) Ltd on Tuesday withdrew its $39 billion offer to buy the London Stock Exchange Group (LSE), putting an end to a deal that could have created the world’s third-largest exchange group in terms of market cap.
In a statement, Hong Kong’s bourse said it was unable to bring LSE’s management on board with its unsolicited approach, despite “a huge amount of work and discussions with a broad set of regulators and extensive shareholder discussions.”
HKEX said it still believed that the combination of the two business would be “compelling” and would create “a world-leading market infrastructure group.”
HKEX’s original offer, which was made on September 11, was rejected by LSE due to “fundamental concerns” about matters such as strategy, deliverability and value, among others.
However, HKEX pressed on with its bid, saying that it would continue to engage with LSE’s shareholders.
Tuesday’s announcement formally ends HKEX’s pursuit of its London counterpart, but also means that LSE can go ahead with its own plans to buy data and analytics firm Refinitv in a $27 billion deal.
The failed buyout comes amid growing perceptions that Beijing is exerting greater influence over Hong Kong prompting widespread protests and demonstrations. This situation has put a strain on the city’s well-developed financial sector, and it is currently unclear how long the current situation will continue.