Tokyo Stocks Exchange (TSE) Group Inc. and Osaka Securities Exchange (OSE) Co. said Tuesday they are going to merge in January 2013 to create the world's second- largest bourse in the world in a bid to increase competitiveness.

To make OSE a subsidiary, TSE will conduct a tender offer to buy the stakes of OSE for 480,000 yen per share by the first half of 2012 to control 66.6 percent of Osaka's shares, the upper limit while they can still keep the Osaka bourse listed.

TSE President Atsushi Saito will become the CEO of the new group, and OSE President Michio Yoneda will be the Chief Operation Officer (COO).

"Domestic mergers and cross-border mergers between exchanges have been gathering momentum overseas," the two bourses said in a statement.

"For a Japanese stock exchange to survive such global competition as a player, it must establish a highly liquid and efficient market and enhance the convenience of investors and companies through strengthening its competitiveness," the joint statement said.

TSE is Japan's largest bourses where most cash stocks are traded, while OSE owns Jasdaq, a Nasdaq-like second board where 50 percent of Japan's derivatives trading are conducted.

Xinhua