LME: Into a New Era


The 135 year-old London Metal Exchange has ended its history as a member-owned exchange, catapulting acquirer Hong Kong Exchanges & Clearing (HKEx) into the commodities big league.


By Guy Isherwood


WHEN THE LONDONMetal Exchange announced a possible sale in September last year, nobody doubted that there would be intense interest from many of the world’s major exchanges. However, there was much scepticism that the diverse shareholder base of this trophy asset, with its 135 years of fiercely independent history, would ever reach agreement on a sale.


The LME’s Martin Abbott told an industry


conference earlier this year that he and his colleagues had picked HKEx as a buyer because it would allow the exchange to push into the commodities-hungry Asian market, preserving the exchange’s dominant position, telling delegates, “The threat from Asia is what kept me awake at night. My concern was; what would happen if


... the acquisition has catapulted HKEx into the big league of commodity exchanges


Hong Kong Exchanges and Clearing Chairman CK Chow (centre right) and LME Chief Executive Martin Abbott (centre left) celebrate the completion of HKEx’s acquisition of the LME with staff inside the iconic LME Ring .


The LME Board ran a flawless multi-stage auction


process, with no delays or derailments, narrowing down a broad field of interested parties. In choosing HKEx as its new owner, the LME have selected a party that not only paid a highly attractive price but – critically – secured the marketplace (pledging not to move the LME from London and to keep its open-outcry trading floor), as well as bringing huge potential upside in Asia.


18 December 2012


China opened up its markets in a more liberal manner, and we’d be left behind?” The LME accounts for 80% of global nonferrous


metals trading, with China alone accounting for an estimated 42% of global base metals consumption.


China Triumphs HKEx triumphed in a global bidding war as the industry’s heavyweights – including CME Group,


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