No Swedish Markets For You!

Too American? What the hell does that mean? Too many hot dogs?
Blow to Nasdaq-OMX merger
Financial Times, 27.06.2007
The Swedish government has emerged as a possible opponent to the proposed merger of OMX and Nasdaq with concerns that a deal could undermine the Nordic market operator’s competitiveness by making it too American and less European.

Mats Odell, minister for financial markets, is to set up a panel of experts to review the proposed deal before the government – which owns 6.6 per cent of OMX – will officially grant its approval.Nasdaq, the US market operator, has agreed to acquire OMX, which operates markets around the Nordic and Baltic regions and sells trading technology to other exchanges, for $3.7bn (€2.7bn) in cash and shares.The Swedish government’s concern highlights worries over US stock market rules that have prompted many American firms to list elsewhere, avoiding its onerous corporate governance, disclosure and supervisory regime.Sweden’s ministry for financial markets said on Tuesday it wanted to be sure US ownership of OMX would not alter “the Swedish model” and replace it with something that might undermine the Nordic market’s competitiveness.“The rules we have are more European, based on European directives. We are planing to implement more European directives. We don’t want this deal to mean that it will harder to raise risk capital,” the ministry said.It added the planned probe into the proposed Nasdaq deal would address issues such as supervision, regulation, costs, disclosure, and the possible impact on turnover and liquidity. No deadline for completion of the probe has been decided.Although the Swedish government only has 6.6 per cent of OMX, any public statement from the government that it does not approve of the deal could deal a serious blow to the proposed transaction.The government is committed to selling its stakes in a range of companies as part of its privatisation drive and must, as part of this process, ensure any deal meets with its social as well as its financial responsibilities.The government has a longstanding desire to transform Stockholm into a leading northern European financial centre to rival Frankfurt, partly by making it easy for companies to raise capital in the Swedish capital.If it concludes that the Nasdaq deal undermines Stockholm’s potential to become a financial centre, it might vote against the Nasdaq deal – impairing part of the rationale behind the transaction cited by OMX and Nasdaq.The largest single shareholder in OMX is Investor, the holding company of the Wallenberg family, with a 10.7 per cent stake, which has backed the Nasdaq deal.OMX declined to comment.