The company that owns the Hong Kong Stock Exchange (HKEX) has made an unsolicited $39 billion takeover bid for the London Stock Exchange (LSE), Reuters reports.
The combination would help both exchanges compete better with US players such as the Chicago Mercantile Exchange (CME). The LSE has long sought to expand its presence in Asia and recently launched a link with Hong Kong rival Shanghai.
However, the offer is contingent on the LSE ditching its acquisition of data company Refinitiv. The LSE announced in August that it had agreed to buy Refinitiv in a $27 billion deal aimed at transforming the exchange into a market data and analytics giant.
In response to the Hong Kong bid, the LSE said it was committed to and continues to make good progress on its proposed acquisition of Refinitiv.
Refinitiv and its majority shareholder Blackstone had no immediate comment.
A statement issued on Wednesday September 11th by the board of the Hong Kong exchange said: "The board of HKEX believes a proposed combination with LSE (Group) represents a highly compelling strategic opportunity to create a global market infrastructure leader."
The takeover bid by the Hong Kong company comes as the UK is set to leave the European Union, a step some politicians fear could weaken its large financial sector.
HKEX, which already has a base in London as owner of the London Metal Exchange, said it had played a key role in underpinning the City of London's position as a pre-eminent global centre for metals trading.
The Hong Kong approach is the latest international attempt to acquire the LSE, Germany's Deutsche Börse has failed three times in recent years, running into opposition from politicians and regulators.
LSE CEO David Schwimmer has said that big bang takeovers in exchanges are difficult due to political concerns and in recent years the LSE has sought to diversify away from basic trading and clearing to data and analytics.
LSE shares jumped 8.7% on the news but eased back later.