THE Singapore Exchange (SGX) and its Australian counterpart ASX have agreed to a multi-billion merger that will create a financial giant and shake up the region's stock markets.

The deal involves the SGX paying A$8.4 billion (S$11 billion) for the ASX - a bold move that promises to be a game changer on several fronts.

It will become the second largest stock market in the Asia-Pacific, with around US$1.9 trillion (S$2.5 trillion) in listed shares, and the fifth biggest in the world.

It would also boast more than 2,700 listed companies from over 20 countries and pack a huge punch from institutional investors, who would have combined assets under management of almost $3 trillion.

But the landmark deal will not come easy - or cheap - for the local bourse.
Besides having to negotiate a series of regulatory hurdles - both here and Down Under - the SGX is offering ASX shareholders A$22 in cash for each ASX share plus 3.473 new SGX shares.

SGX-ASX merge in $11b deal