IntercontinentalExchange today announced that it has entered into a definitive merger agreement to acquire Creditex Group Inc., which engages in the execution and processing of credit default swaps for markets in the U.S., Europe and Asia.

ICE is paying US$625 million for the firm, comprised of approximately US$565 million in ICE common stock and US$60 million in cash, as well as a working capital adjustment to be finalized at closing. Approximately US$50 million of the cash component is intended to provide some liquidity to employees that hold Creditex stock, and the remaining cash will be provided to unaccredited Creditex shareholders in lieu of shares.

Upon the closing of the transaction, expected during late third quarter 2008, Creditex Group will be a wholly owned subsidiary of ICE, operating under the Creditex name. The transaction is expected to be accretive in 12 to 18 months from closing. Based on recent results and expected synergies, the transaction would yield US$9 million to US$14 million in total pretax synergies in 2009, comprising incremental revenues and expenses.

The transaction is subject to the receipt of required government approvals, including the expiration of the applicable Hart-Scott-Rodino waiting period, the receipt of UK Financial Services Authority approval and other regulatory approvals.

“We are pleased to announce this exciting strategic combination and for the opportunity to serve the interdealer CDS market by joining with an established market leader,” said ICE’s chairman and CEO Jeffrey Sprecher, in a release. “We believe that together we can meet the demand for enhanced operational and risk management tools required by dealers and their clients today. The credit derivatives sector is one of the largest segments of the OTC market, and we expect that the highly regarded team at Creditex will continue to lead with innovative solutions to ensure that liquidity and risk management tools evolve with these markets.”