Australian Finance Minister Wayne Swan has officially rejected the proposal on the merger of Singapore (SGX) and The Australian (ASX) stock exchanges. According to Agence France-Presse, the Australian Ministry of Finance described the deal as the absorption without any benefit for the country.

According to Swan, in case of the deal, the government would lose control of the Australian Stock Exchange, through which all transactions in the local market are going. This contradicts the strategy of creating Australia's regional financial center. Ministry of Finance of Australia found that the amount proposed by the SGX for the merger – 8,4 billion Australian dollars (8.7 billion U.S. dollars) – does not compensate for the risks that may accrue to the country's economy.

ASX has considered a merger as an opportunity to expand into new markets after the reduction of the volume of transactions in Australia because of the financial crisis. Price offered by Singapore is 20 times higher than annual profit before tax exchanges and twice better than a similar offer to the London Stock Exchange to the Toronto Stock Exchange. Bloomberg suggests that the ASX will seek to contract with SGX on more favorable terms.

As writes The Wall Street Journal, the decision of the Ministry of Finance and Foreign Investment Review Board will hit the country's investment image. To veto such a deal is imposed for the first time since 2001, when the company Royal Dutch Shell were denied the purchase of the national oil company, Woodside Petroleum. Nevertheless, the Australian authorities emphasize that they do not want to discourage foreign investment.

It is worth to note that Australia is not the only country which restricts international trade companies. Last year, Canadian authorities have banned local absorption of transnational mining giant BHP Billiton, and now there is an active discussion of the expected merger of the Toronto Stock Exchange and London Stock Exchange, the decision on which is also is not clear yet.