Maple-TMX deal wins final regulatory approvals

TORONTO Wed Jul 11, 2012 7:22pm EDT

TORONTO (Reuters) - The C$3.8 billion ($3.72 billion) acquisition of Canada's TMX Group cleared its final regulatory hurdles on Wednesday, allowing a financial consortium to take control of all of the country's major securities exchanges and related businesses.

Concluding a year-long review process, regulators in the provinces of British Columbia and Alberta approved Maple Group's acquisition of TMX - the operator of the Toronto Stock Exchange and TSX Venture Exchange for small-capitalization stocks.

Under its broad proposal, the consortium of Canadian banks, insurers and pension funds will also acquire TMX's biggest rival, Alpha, as well as the Canadian Depository for Securities, which settles all stock trades in the country.

"We are happy that the deal is going to be concluded and that we will have a strong national stock exchange," said Thomas Caldwell, chairman of Caldwell Financial, which owns shares of TMX.

Regulators in the provinces of Ontario and Quebec, and the federal Competition Bureau, approved the deal earlier in July.

Canada has no national securities regulator, which means Maple needed the blessings of multiple watchdogs for its bid to succeed.

COMPLEX DEAL

TMX agreed to back Maple's bid last October, after initially rejecting an unsolicited offer that the banks and their partners put together to scupper an earlier offer by the London Stock Exchange.

"We would've preferred to see London to this deal. But we prefer to see this deal to no deal," said Caldwell, who initially opposed the Maple initiative.

Maple said its proposal was the best way to keep Canadian exchanges out of foreign hands, even as a wave of foreign firms launched bids for global rivals in the exchanges sector. Many of the proposed deals have since fallen apart in the face of strong opposition from regulators.

The fact that TMX and Alpha control about 85 percent of all stock trades in Canada had raised antitrust concerns. But the Competition Bureau said the Ontario Securities Commission's rules that will govern the new combined entity had mitigated its concerns.

"I think it's a very positive thing for Canada. I think it's a positive thing for our economy. I would like a wider ownership distribution. But it's not a perfect world," said Caldwell.

The bureau has reserved the right to revisit its decision if any issues arise within a year of the deal's closing, a stipulation that is common. Shares of TMX Group closed up 20 Canadian cents at C$48.85 on the Toronto Stock Exchange on Wednesday.

($1 = $1.0206 Canadian)

(Reporting by Jennifer Kwan and Euan Rocha; editing by Frank McGurty)

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