Why does Nasdaq want to buy the London Stock Exchange?

Question

What are the motives?
What are the implications?
What is the feasibilty?

Answer 1

The actual bid has expired although NASDAQ still owns a large part of the London Stock Exchange. London is attractive because many of the IPOs nowadays are coming from foreign companies in Russia, China, India, Eastern Europe etc. Many of these firms prefer to list their stocks on the London Stock Exchange to avoid the SEC and Sarbannes/Oxley concerns.
So the London Stock Exchange has emerged as the pre-eminent European stock exchange and London is becoming the financial capital of the world.

The LSE is not going to be bought by the NASDAQ any time soon because the LSE believes it is worth more than NASDAQ will pay.

Answer 2

Great question. I had the same one. Simple answer is....its all about money and profits. Stock exchanges are simply businesses that provide a service and make money doing it. If one has the ability to buy another exchange and in doing so will make more money and profits...why not! Last few years have seen lots of activity in mergers and acquisitions with companies in all kinds of industries. This is just one example. Feasibility? Probably not now, but always a possibility in the future.

Answer 3

DH has a theory that Sarbox has made US markets much less attractive to companies. I tend to agree. It has made audits tons more expensive, even for private companies b/c big firms do not even want to do a non-Sarbox audit, so you end up paying for more than you need. We call Sarbox the CPA Full Employment Act.

Soooo, if more companies are going to be listing on foreign exchanges, the NASDAQ will be smart to buy stakes in them.

Answer 4

In simple terms because its a good business.

Implications the dollar overpowering the euro a bit more, but not devaluating any of them, just getting larger worldwide acceptance.