Banking, finance, and taxes
London Metals Exchange Moving to Hong Kong (NYX, ICE, CME)
Published:
The world’s largest base metals market is moving to the Far East. The 135-year-old London Metals Exchange (LME) has agreed to be acquired by Hong Kong Exchange & Clearing (HKEx) for $2.2 billion in cash. LME shareholders are expected to vote on the deal by July, with a 75% approval vote needed to cement the deal.
LME sets the world’s benchmark for contracts on copper, aluminum, and zinc, and trades other base metals as well.
The LME has been the object of a nine-month auction that included NYSE Euronext Inc. (NYSE: NYX), IntercontinentalExchange Inc. (NYSE: ICE), and CME Group Inc. (NASDAQ: CME) along with HKEx. The winning bid values the LME at 22x the last traded price before the exchange announced that it was for sale and 180x the exchange’s 2011 net profit. A tidy profit for shareholders.
The winning bidder has promised to maintain the LME’s open outcry trading floor, its network of bonded warehouses, daily contract clearing, and members’ involvement in decisions. HKEx plans to boost LME trading volumes by fostering ties to mainland China, where the Shanghai Metals Exchange has handled futures contracts in base metals since 1992.
Paul Ausick
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
