Hong Kong Exchange (HKEx) Buys the London Metal Exchange (LME)
The Hong Kong Exchange (HKEx) has won the bidding to buy the London Metal Exchange (LME) for $2.15 billion. HKEx won the bidding process over the IntercontinentalExchange (ICE) in Atlanta and Chicago Mercantile Exchange (CME).
The LME handles 80% of global metals trading – including gold, silver, copper, aluminium, and nickel – of which China is the largest consumer. This purchase by HKEx is seen as giving the LME a stronger presence in China.
Currently the HKEx does not handle commodities contracts, so this is new territory for them. Their current activities are focused on IPO as Chinese companies try to go global. So far they have raised $3.2 billion in 2012.
The LME will still be based in London, and still use the open-outcry trading execution — the last exchange to do so. The LME’s network of 600 warehouses will remain and even grow in China to increase domestic activity.
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