Copenhagen Stock Exchange merges with OMX

Oslo Børs and Iceland Stock Exchange also urged to join combined entity

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Nordic exchange operator OMX will purchase all outstanding shares of the Copenhagen Stock Exchange (CSE). OMX is the parent company of the Helsinki, Stockholm, Tallinn, Riga, and Vilnius stock exchanges. On Monday a letter of intent to merge operations was signed by OMX and CSE.
      A formal combination agreement will be announced in December and the actual merger is to take place during 2005.
      The fusion of CSE into OMX hardly comes as a surprise to anyone. After all, rumours of the merger have been doing the rounds throughout the autumn.
     
The aim of the deal is to contribute to the unification of the Nordic and Baltic securities markets and to strengthen OMX's position as one of the leading exchange operators in Europe.
      The final objective is to establish a truly integrated Nordic and Baltic securities market in 2006.
     
OMX is prepared to acquire all outstanding CSE shares for a total value of Dkr 1,220 million, which translates to EUR 164 million.
      Shareholders of the Danish market will be given a chance to choose either a cash compensation or newly issued shares in OMX, or a combination of the two.
      All the largest shareholders of CSE have announced they welcome the move. After the merger, CSE will continue as the Danish stock exchange following the OMX operations model.
     
The head of OMX Exchanges Jukka Ruuska, who on Friday was also appointed the president of the Stockholm Stock Exchange, will oversee the running of the Danish exchange, while Hans-Ole Jochumsen, president and CEO of CSE, will become deputy head of OMX Exchanges.
      A total of 187 Companies are listed on CSE, while the entire OMX portfolio encompasses 500 or so firms.
      CSE provides work for 43 brokers, in comparison with the 122 involved with OMX.
     
According to Magnus Böcker, President and CEO of OMX, the move is a natural step forward. "Together we are significantly stronger. This allows us to simplify trading while offering our customers a larger portfolio of products", Böcker said on Monday.
      Böcker also said a natural continuation to this development would be the introduction of the Oslo and Reykjavik exchanges to the combined entity.
      The OMX-CSE merger is estimated to bring in synergy cost savings in the region of DKr 25 million per annum, while the restructuring itself has a price tag of about DKr 50 million attached to it.


Links:
  OMX Group
  Copenhagen Stock Exchange
  OMX/CSE Letter of Intent, 15.11. (.pdf file)

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