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- Combination creates an integrated, multi-asset class exchange group
- Combination strengthens Montréal’s position as the Canadian centre for derivatives expertise
- MX shareholders to receive 0.5 of a common share of TSX Group and $13.95 in cash, after the effect of full proration
- Represents $39.00 in value per MX common share based on the November 28, 2007 unaffected price of TSX Group common shares
- Represents $42.56 in value per MX common share based on the December 7, 2007 closing price of TSX Group common shares
- MX Board of Directors recommends that MX shareholders vote in favour of the combination
Montréal Exchange Inc. (MX) and TSX Group Inc. (TSX Group) today announced that they have agreed to combine their organizations to create TMX Group Inc. (TMX Group), a leading integrated exchange group.
“This combination grows out of a common vision for the future of the Canadian capital markets. Customers in Canada and internationally will benefit from increased liquidity levels, accelerated product development, a fully diversified product suite, and superior technology,” said Richard Nesbitt, Chief Executive Officer of TSX Group. Luc Bertrand, President and Chief Executive Officer of the Montréal Exchange continued, “The new group will redefine the Canadian capital markets and strengthen its global positioning. TMX Group will list, trade, clear and offer market data for both cash and derivatives markets across multiple asset classes.”
“We are creating a new exchange group that builds on the respective strengths and successes of both organizations,” said Mr. Bertrand. “I am enthusiastic about the future of the derivatives markets that Montréal Exchange has been building for many years. Through this agreement, Montréal will remain the centre of Canada’s derivatives markets.”
“The combination is an important milestone in the development of the Canadian capital markets, delivering benefits to all market participants and the shareholders of both organizations,” said Mr. Nesbitt. “We believe that an integrated national exchange is the optimal solution to meet the evolving requirements of our broader customer base.”
The head office of TMX Group will be located in Toronto. The Board of Directors, with 18 members initially, will be chaired by Wayne Fox, the current chair of TSX Group. It will include five MX designated board members, including Mr. Bertrand. The agreement requires that 25% of the directors of TMX Group be residents of Québec.
The head office of MX and the derivatives trading and related product operations will remain in Montréal. The Canadian Derivatives Clearing Corporation (CDCC) will expand its clearing mandate and continue to have its head office in Montréal. MX will also continue to manage the Montréal Climate Exchange as it develops into a leading market for exchange traded environmental products in Canada. The Autorité des marchés financiers (AMF) will continue as the lead regulator for MX’s operations. TMX Group will remain subject to a 10% ownership restriction, amendments to which will require the approval of each of the Autorité des marchés financiers and the Ontario Securities Commission.
Under the terms of the agreement, Mr. Nesbitt will be the Chief Executive Officer and Mr. Bertrand will be the Deputy Chief Executive Officer of TMX Group. Mr. Bertrand will continue in his role as President and Chief Executive Officer of MX. He will also assume responsibility for information technology of the TMX Group.
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