Swiss bourse SIX determined to resist foreign merger

Wed Oct 3, 2012 12:41pm EDT

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ZURICH Oct 3 (Reuters) - The Swiss bourse SIX said it had no interest in being taken over by Deutsche Boerse and told its northern neighbour it had the unanimous backing of shareholders to resist a move that made no business sense.

"We want to remain independent," Peter Gomez, chairman of SIX's supervisory board, told journalists on Wednesday.

He said SIX decided a month ago - after a year-long investigation - that a merger with a bigger exchange would not help control costs through economies of scale.

"That was a unanimous decision, including the big banks," said the 65-year-old, who will be succeeded next May by former HSBC private banker Alexandre Zeller.

SIX, which Gomez said had received overtures from Deutsche Boerse in recent years, has lost market share to rising competition from low-cost rival trading platforms and the erosion of the profits of exchanges has led to a wave of mergers in recent years.

One of the biggest would have been the $7 billion deal between NYSE Euronext and Deutsche Boerse to create the world's largest exchange operator. The tie-up was blocked by European anti-trust authorities.

Switzerland's two biggest banks - UBS and Credit Suisse - hold large stakes in SIX which is owned by about 150 Swiss and foreign financial institutions which also use its services.

Gomez said Deutsche Boerse had been particularly interested in SIX's securities trading and clearing business as well as its financial information unit.

SIX's third pillar - debit and credit card transactions- might possibly have been sold off in the event of a merger, Gomez said.

SIX's aim of providing its owners with a stable financial infrastructure was also at odds with the objective of hedge funds - which are big stakeholders of Deutsche Boerse - to maximise profits, Gomez said.

At the start of this year, SIX sold its stake in futures platform EUREX to Deutsche Boerse for 295 million euros in cash plus 5.3 million shares in the German bourse.

The majority of those shares had since been sold off and SIX was looking to disperse of the rest too, rather than use them for strategic purposes, Gomez said.

"The shares are available, to be turned into cash at the most opportune moment," he said.

The German and Swiss exchange operators together own the index-provider Stoxx and the derivatives-platform Scoach. Gomez said SIX intended to remain part of those joint ventures. (Reporting by Oliver Hirt, writing by Catherine Bosley and Andrew Thompson; Editing by David Cowell)

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