LME plans expansion

5 January 2007

The London Metal Exchange (LME) has unveiled plans to expand its business significantly over the next five years, as it attempts to fight potential future takeover bids.

The exchange's chief executive Martin Abbot has rejected the possibility of a flotation, saying instead that the company would launch four new contract types with the aim of doubling its trading volumes in the near future.

Mr Abbot hopes that the expansion plans will help deter rival exchanges who are considering possible merger or acquisition opportunities.

"The LME as a business can't afford to stand still," Mr Abbot said, according to the Independent.

"As exchanges succumb to the urge to merge... one has to assume they will be looking for other business sectors to move into.

"We want to make sure that if there is expansion in metals it comes from the LME, not someone else moving into it."

The comments follow significant merger and acquisition activity between exchange operators, with both the New York Stock Exchange and Nasdaq pursuing European exchange acquisitions.

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