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Dec 19, 2012

IntercontinentalExchange agrees to buy NYSE Euronext for $8.2 bn

ICE hopes to spin off Euronext in public offering

IntercontinentalExchange (ICE), the Atlanta-based energy and commodities bourse, has agreed to buy NYSE Euronext for $8.2 bn in a move that could lead to the break up of the exchange group.

ICE says it will explore a sale of Euronext, which operates stock exchanges in Paris, Amsterdam, Brussels and Lisbon, through an initial public offering once the deal closes.

The news underlines how company listings and share trading have paled in significance for exchange groups. Analysts say the main driver of the deal was ICE’s desire to capture Liffe, the European derivatives exchange bought by NYSE Euronext in 2007.

‘ICE is after Liffe, that is the crown jewel of NYSE Euronext,’ says Peter Lenardos, an analyst at RBC Capital Markets, according to a Reuters report. ‘Strategically it makes sense for ICE to enter the European derivatives space in a meaningful way.’

Under the terms of the agreement, ICE will pay $33.12 for each NYSE share through a mix of cash and shares. The deal, which has been backed by the boards of both companies, will need to receive approval from both sets of shareholders, as well as regulators in Europe and the US.

Analysts do not expect the deal to experience problems with competition authorities, given the distinct businesses of the two companies. ICE and NASDAQ OMX had to drop a bid for NYSE Euronext last year after US antitrust officials made it clear they would not allow the deal to go through.

ICE has said it will support the 208-year-old NYSE brand and plans to locate its New York headquarters in NYSE’s iconic Wall Street building.

‘Our transaction is responsive to the evolution of market infrastructure today and offers a range of growth opportunities, while enhancing competition in US and European markets and broadening our ability to address new markets and offer innovative products and services on a global platform,’ comments ICE chairman and CEO Jeffrey Sprecher, in a release.