Russia’s bourses MICEX and RTS have signed an agreement that may see them merge. MICEX announced its shareholders signed an agreement of intent under which the MICEX is to acquire a controlling stake in RTS. RTS shareholders will own more than 50% stake in the Exchange.
President of the MICEX Group Ruben Aganbegyan said the agreement starts the process of unification of Russia’s two largest exchanges on the market basis. The unification of platforms, technologies and human resources of the two companies will enable them, in the near future; establish a powerful trading floor in Moscow that can become one of the fastest growing exchanges in the world.
The merger will create additional value for the MICEX and the RTS shareholders. It will also make a positive impact on the functioning of the Russian market by substantially increasing the overall level of its liquidity, said Aganbegyan.
Under the terms of the agreement, the legal and business plan for the unification of the two exchanges will be prepared before 15 April. The transaction is expected to close before the end of the second quarter of 2011. However, the transaction is still subject to approval from the Russian Federal Antimonopoly Service and other regulatory bodies. The technological merger of the two exchanges can be completed during 2011–2012.
Further to the terms of the deal, 35% of the purchased block of the RTS shares will be paid for in cash, 65% with will be paid for in shares in the MICEX. The MICEX Group is going to offer other RTS shareholders to join this agreement on these terms.
The merger of Russia’s two largest exchanges will enable to create a single powerful infrastructure of the financial market that will have with a strong team of professionals and will adhere to modern principles of interaction between the subdivisions of the combined company and market participants. This step is crucial to the creation of an international financial center in Moscow.
Chairman of the RTS Board Roman Goryunov said he believes the signing of the agreement is a major step forward in the creation of a single strong exchange. Combining the best experience of the two companies can provide a great synergy and strengthen Russia’s position in the international market, he said.
A dynamic and efficient team with great potential, modern trading technologies, services and instruments for which market participants have demand, as well as a unique system of risk management will guarantee Russia’s success in the global financial market, added Goryunov.