The Hong Kong’s stock exchange made a €35.43bn ($39bn) offer for the acquisition of the London Stock Exchange on Wednesday.

The offer is below the current valuation of the LSE.

A statement issued by the parent company of Hong Kong’s stock exchange (HKEX) described the offer as “a highly compelling strategic opportunity” that will give rise to a global market leader worth $70bn spanning Asia, Europe, and the United States.

The offer comes after the European Commission blocked a merger between Deutsche Boerse and the LSE in 2017 and just as the City of London seeks to redefine its role in a post-Brexit world. While political and regulatory risk weighed in the Deutsche Borse merger that may also be the case for HKEX, as it would effectively give China a political veto over the UK’s most strategic economic sector.

As the same time, the merger would allow the LSE to position itself in Asian markets and present a formidable competitor to Shanghai. Crucially, the emerging group would dominate Eurodollar and Remnibi trading, with the LSE gaining privileged access to mainland China.

Last year the Hong Kong stock exchange reported a $1,2bn profit. Hong Kong is the Stock Exchange of choice for globally significant Chinese corporates and is a conduit for international investors to the Shenzhen and Shanghai markets.

One of the conditions of the KKEX offer is that the LSE abandons its offer for the takeover of the data firm Refinitiv, a group that also owns Thomson Reuters and the private equity house Blackstone. In a statement issued on Wednesday, the LSE reiterated its commitment to the Refinitiv deal, the BBC reports.