IntercontinentalExchange Inc. (ICE: Quote), an operator of global regulated futures exchanges, on Monday announced an agreement with Dutch natural gas infrastructure and transportation firm N.V. Nederlandse Gasunie to form a new company based on the derivatives and spot gas exchange of Anglo-Dutch energy exchange APX-ENDEX.
Under the deal terms, ICE agreed to acquire 79.12 percent of the derivatives and spot gas business of APX-ENDEX, while Gasunie will retain the remaining 20.88 percent stake. ICE expects that the acquisition would expand its regulated execution and clearing services for the global energy markets.
Earlier today, APX-ENDEX in a separate statement announced its intention to rearrange the current combined gas and power businesses into two separate entities: a power spot and clearing entity and a derivatives and gas spot entity. With the split, the company expects to create maximum strategic flexibility and improved opportunities for the development of each business. APX-ENDEX stated that the ownership will also change together with the proposed separation of the companies.
APX-ENDEX's power spot and clearing entity will be owned by TenneT Holding B.V. as majority shareholder and Elia System Operator N.V. Fluxys Europe B.V. will not be a shareholder in either of the two new entities.
ICE noted that its transaction consideration, which is yet to be revealed, will be funded by cash on hand and the transaction is expected to close by the end of the first quarter of 2013. The deal is subject to regulatory approvals and certain closing conditions.
David Peniket, President & Chief Operating Officer, ICE Futures Europe, said, "As an important energy trading hub and a strong European economy, the Netherlands is an ideal geographical location for ICE's expansion into continental Europe. The derivatives and spot gas business will benefit from ICE's world class trading and clearing expertise."
Societe Generale Corporate & Investment Banking advised ICE on the transaction and Shearman & Sterling LLP and Loyens & Loeff N.V. served as its legal advisors.
APX-ENDEX, in its statement, said its derivatives and gas spot entity intends to provide a highly liquid and efficient continental European hub for trading gas and power derivatives, as well as integrated gas within-day balancing markets and gas storage markets. The power spot and clearing entity, alongside the further development of its UK, Dutch and Belgian spot power markets, aims to drive market innovation further and to create new opportunities, the company added.
APX-ENDEX added that the power spot and clearing entity will also remain the clearing house to all power and gas spot trades on both businesses. This further strengthens the current efficient, low cost cross-commodity spot market clearing solution to the benefit of all market participants.
ICE shares closed Friday's trading at $140.09, up $3.24 or 2.37 percent.
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by RTT Staff Writer
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