As politically controversial City deals go, you couldn’t get more explosive. Just as the youth of Hong Kong take to the streets in protest at the creeping influence of neighbouring China, so their city’s stock exchange launches a stunningly high-priced bid to take over ours.
We’ve seen a flood of foreign takeover deals for UK giants since Brexit torpedoed the pound, but none as shocking as this — a deal which would see the infrastructure behind our entire capitalist system being run by a special administrative region of the People’s Republic.
The government and regulators will rightly look long and hard at whether this is a step too far, even if it does show foreigners still prize UK assets despite our EU departure.
My suspicion is they’ll wave it through like they did Deutsche Börse’s failed offer not so long ago. London thrives on being open to international capital.
And what a powerful combination the two exchanges would make; Europe’s biggest market combining with the might of China’s capitalist offshoot.
So much so, one wonders if the US will sit back and let it happen. Will Donald Trump be overjoyed at US investment banks trading billions of dollars of London deals a day on platforms controlled by Hong Kong? I think not.
US giants, the Chicago Mercantile Exchange and the Intercontinental Exchange will feel pressured to launch bids of their own. ICE already owns London’s futures exchange and may struggle on monopoly grounds, but the CME less so. Will it be galvanised into adding London’s jewel to the NEX exchange it recently bought?
To paraphrase the Chinese curse: these are interesting times indeed.
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