TALLINN STOCK EXCHANGE

ANNOUNCEMENT

 

POSSIBLE MERGER OF TSE AND ECDS

 

On Friday, December 10, the Supervisory Board of Tallinn Stock 

Exchange (TSE) authorised the TSE management to start negotiations 

with the Estonian Central Depository for Securities (ECDS) with the 

aim of deepening the co-operation, and possibly merging, the two 

organisations and to prepare the necessary documents.

 

The aim of the process is to create a stronger, more efficient and 

flexible organisation, which would be better able to satisfy the 

needs of its clients, while increasing its competitiveness in the 

context of international developments.

 

The united entity would be the focal point of the Estonian 

securities market infrastructure, furthering the interest of the 

securities market as a whole. 

 

The two organisations are already similar in structure and culture 

and joint activities are taking place in many fields, such as 

cost-sharing in information technology and administrative expenses.

 

The two entities also have a relatively similar composition of 

shareholders. TSE shareholders have 75 per cent of ECDS shares, 

while ECDS shareholders hold a 42 per cent stake in TSE. The 

majority of shareholders in both organisations are market 

participants - commercial banks and brokerage companies. The merger 

would enable to create a stronger, more stable and better 

capitalised organisation, thereby decreasing risks without 

additional capital injections by owners. 

 

In addition to increased efficiency through lower costs, synergy 

effects from  additional joint activities, such as product 

development, marketing and market supervision, are expected. 

 

The merger of ECDS and TSE would increase competition in the 

securities market, decreasing costs to end customers - investors - 

and speeding up the development of the securities market as a 

whole. Market participants, especially brokerages, would have 

better opportunities to offer integrated services. 

 

The TSE management plans to submit the merger programme, which 

outlines the strategy and structure of the merged organisation and 

concrete merger conditions, by the end of first quarter next year. 

The management aims to submit the merger agreement for approval to 

the 2000 annual general meeting of shareholders.

 

 

Additional information:

Eva Palu

Head of Investor Relations Dpt

Tel: +372 6408 840