The Impact of the Proposed Merger of
ASX Limited and Singapore Exchange Limited on the Ability of Australian Companies to Raise Equity Capital

Prepared by
Shanmugam Arumugam S00110197
Mahamudul Hasan S00110201
Australian Catholic University Introduction

In a typical life cycle of a corporation, with good management in place, efficient use of resources including financial resources and implementation of best practices, the company is seen to grow from within i.e. organic growth . This growth will plateau at stage where there is no more room to grow organically. So what happens next?
A company which has grown organically armed with surplus financial and other resources will now need to stay ahead in the marketplace. And to do this the only way to go forward is via acquisition of related businesses, merge with competitors or diversify into new business areas.
If merger or acquisition is the answer, then this opens up a range of issues comprising strategic fit, different corporate culture, regulatory rigidity and not forgetting national interest!
The Board at the ASX Limited (ASX) is now faced with similar quandary.

On 25th October 2010, ASX and the Singapore Exchange (SGX) made a combines press release which states “… that both parties have entered into a merger implementation agreement to combine to enable customers globally to capitalise on listing, trading, clearing and settlement opportunities created through the expanded platforms, leveraging on the importance of Asia Pacific as the driver of global growth ….”

Fast forward today, the proposed merger has been blocked by the Australian Federal treasurer.
This paper seeks to investigate the impact of the proposed merger and the effect on the Australian companies to raise equity capital Issues of the Proposed Merger

Control issue
According to the Economic Intelligence Unit , the