TSX Group, which owns the Toronto Stock Exchange, is to buy the Montreal Exchange, after overcoming resistance from its management.TSX will pay Montreal Exchange shareholders in either cash or stock, at C$39 ($38) a share - which values the Montreal exchange at C$1.20 billion.
After the deal closes in the first quarter of next year, the company will be renamed TMX Group. The current TSX chairman and chief executive, Wayne Fox and Richard Nesbit, will stay in their posts, with Montreal chief executive Luc Bertrand becoming deputy chief executive of TMX.
The news follows a long courtship between the two exchanges - in May last year the deal looked set to collapse, as the TSX suggested it could set up its own derivatives exchange in Montreal, in partnership with the New York International Securities Exchange, rather than push the merger in the face of opposition from Bertrand at the Montreal exchange.
The announcement leaves uncertain the future of TSX's planned joint venture with the New York International Securities Exchange, under which the two exchanges would set up a derivatives exchange, Dex, in Montreal in 2009, once TSX's non-compete agreement with the Montreal exchange expired. TSX has not commented on whether the plans will now be shelved.
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