Five years after fighting off Nasdaq's "hostile" takeover attempt, then its "unsolicited" bid, the London Stock Exchange ("LSE") LSE finds itself in advanced merger talks with the Toronto Stock Exchange - termed "a possible merger of equals."  If combined, the 2 exchanges would form what would probably be the largest market for mining and other natural resource stocks.

Any deal would probably face several political hurdles in Canada, where foreign takeovers related to natural resources have become delicate issues.  In November, Canada’s federal government declined to approve a $39 billion bid from BHP Billiton of Australia for the Potash Corporation of Saskatchewan.

Like other exchanges around the world, both the TSE and LSE face increasing competition from alternative trading systems.  In January, the Singapore exchange (SGX) completed plans to buy its Australian counterpart ASX, another exchange heavily weighted with natural resource stocks, in a deal valued at $8 billion.  [NYT Dealbook, 2/8]