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Kevan Cowan, head of the TMX Group's equities business (Philip Cheung/Philip Cheung for The Globe and Mail)
Kevan Cowan, head of the TMX Group's equities business (Philip Cheung/Philip Cheung for The Globe and Mail)

Streetwise

Don't fear the merger, TMX executive says Add to ...

Kevan Cowan is a big fan of multiculturalism and mixed marriages.

As head of the TMX Group Inc.'s equities business, Mr. Cowan told mining industry executives gathered in Toronto on Monday that some Canadians are just behind the times when it comes to embracing the benefits of a truly international exchange.

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His message? Now is not the time to fear "international alliances" -- especially when it comes to the TMX Group's proposed $7-billion-plus merger with London Stock Exchange Group plc.



"It was really interesting being at the select hearings at the [Ontario] legislature last week as we all debate, you know, the pros and cons of an international merger and arrangement of exchanges," Mr. Cowan told delegates at the Prospectors and Developers Association of Canada's International Convention, Trade Show, & Investors Exchange.

"I was looking at the personalities involved and I was thinking about the London Stock Exchange. The London Stock Exchange -- that icon from a couple of centuries -- is actually led by a Frenchman and [it]owns the Italian stock exchange. So you can see the international nature of this is already occurring and well ahead of the debate that we are having here in Canada in terms of control and participating in international alliances."

That famous Frenchman is, of course, Xavier Rolet, chief executive officer of London Stock Exchange Group. In October, 2007, the LSE merged with Borsa Italiana.

Although the proposed TMX-LSE deal is being billed a "merger of equals," some key politicians -- including Ontario Finance Minister Dwight Duncan -- remain dubious. Regulatory hearings began in Ontario last week and the legislature's all-party committee is scheduled to release its report by April 7.

One key concern is that shareholders of TMX Group would end up with seven of the 15 seats on the combined entity's board of directors -- suggesting that majority control would actually reside outside of Canada.

Mr. Cowan was eager to set the record straight on that point on Monday, noting that because of London's previous deal with Borsa Italiana, the eight remaining board seats would be split between five UK representatives and three Italians.

"Canada, in fact, has the plurality in that situation," he said.

Last week, Tom Kloet, chief executive officer of TMX and Xavier Rolet, his counterpart at the LSE, told the all-party committee the deal would allow companies currently listed in Toronto better access to European investors -- a potential boon to Canadian junior mining companies.

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