Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, recently announced it has agreed to sell Trayport to TMX Group Limited (TMX Group) in exchange for certain TMX Group assets and cash of £350 million. In addition to cash, ICE will receive NGX and Shorcan Energy Brokers Inc. upon the completion of the transaction. In connection with the execution of the Agreements, ICE and TMX Group have also entered into a non-binding memorandum of understanding agreeing to explore in the future further avenues for possible collaboration.
Headquartered in Calgary, NGX provides electronic trading, central counterparty clearing and data services to the North American natural gas, electricity and oil markets. ICE and NGX have had a longstanding and comprehensive strategic alliance to enable customers to conduct physical clearing for certain natural gas and power hubs through NGX’s clearing house, which is a CFTC-registered Derivatives Clearing Organization (DCO). NGX’s exchange is CFTC-registered as a Foreign Board of Trade (FBOT). Shorcan Energy offers brokerage services for the North American crude oil markets.
The U.K. Competition and Markets Authority (CMA) has approved the sale of Trayport to TMX Group. The sale of NGX and Shorcan Energy to ICE is subject to regulatory approvals and notifications, and is anticipated to close in late 2017 or early 2018. ICE will provide more details on its third quarter earnings call on November 2, 2017.
“We look forward to offering our customers further efficiencies and risk management solutions in the North American physical energy markets to meet their needs for capital efficiency and regulatory compliance,” said ICE Chairman and CEO Jeffrey C. Sprecher. “We believe this is a positive result for our customers and shareholders, and we are divesting Trayport in a manner consistent with the CMA’s requirements. We believe expanded clearing solutions will be appreciated by customers seeking more choice in risk management and more efficiency in how they execute and clear.”
ICE’s lead financial advisor is Citi; further financial advice is provided by Goldman Sachs & Co. ICE’s legal advisor is Shearman & Sterling LLP.