Britain's LSE in deal to buy Toronto exchange

The London Stock Exchange is to buy the owner of the Toronto Stock Exchange in an all share deal to create a major centre for trading in mining shares if likely political opposition in Canada can be overcome.

LSE shareholders will end up owning 55% of the combined group, the companies said on Wednesday.

Shareholders in TMX Group will receive 2.9963 LSE shares for each TMX share, creating a group that based on their current share prices will have a combined market capitalisation of 4.3 billion pounds (USD 6.9 billion).

The deal values TMX at about USD 3.2 billion basde on Tuesday's prices. The new company will be run by Xavier Rolet, who will be based in London and is currently chief executive of the London Stock Exchange. TMX finance chief Michael Ptasznik will be chief financial officer of the new group and based in Toronto.

"We are creating the world's largest listings venue for the commodities, energy and natural resources sectors, as well as the premium market for small, mid-size and growth companies," Rolet said in a statement.

With over 6,700 companies worth a total of 3.7 trillion pounds (USD 5.9 trillion) listed on the two exchanges, the combined group will be the biggest in terms of listings although it will still be smaller than the leading US player -- NYSE Euronext -- in terms of volumes traded.

The value of trading in mining and energy shares has surged in recent years as demand from fast-growing emerging economies drives a boom in commodity prices.

The deal comes as the Singapore Exchange works to push through its proposed USD 7.8 billion acquisition of Australian stock exchange operator ASX -- another major centre for mining stocks -- in a deal that has run into strong opposition in Australia.

(USD 1=.6,223 Pound)