Both firms have been involved in exchange merger deals in recent years, with LSE failing in its attempt to combine with Deutsche Boerse AG and HKEX acquiring London Metal Exchange in 2012 for 1.4 billion pounds.
“These are two major security exchanges in the world,” said Ronald Wan, chief executive at Partners Capital International in Hong Kong. “A takeover from Hong Kong, a special administrative region of China, could be seen as a takeover from China. It won’t be easy to clear all the regulatory hurdles -- the deal is super politically sensitive.”
UK Business Secretary Andrea Leadsom, speaking on Bloomberg Television as news of the deal broke, said the British government would scrutinize any tie-up between the exchanges. Leadsom said the UK authorities would “look very carefully at anything that had security implications for the UK.”
