Hot on the heels of the closing of its deal for NYSE Euronext, IntercontinentalExchange Group, Inc. (ICE) said Tuesday that it is buying the Singapore Mercantile Exchange (SMX) in an all-cash deal.
ICE announced a definitive agreement to acquire the SMX in a deal that, it says, will give it a foothold in Asia, and add to its current network of markets and clearing houses in the U.S., Canada, Brazil, the UK and Europe. The SMX operates futures markets in Singapore for metals, currencies, energy and agricultural commodities, and it is licensed to operate as both an exchange and a clearing house, so the deal provides ICE with exchange and clearing infrastructure in Asia for the first time, it notes.
Under the terms of the agreement, which has been approved by the boards of both companies, ICE will acquire 100% of the SMX, which includes the SMX Clearing Corporation (the clearing house for all SMX trades). The price for the deal was not disclosed. The transaction is expected to close by the end of 2013, subject to applicable regulatory approvals and closing conditions. SMX is regulated by the Monetary Authority of Singapore.
“The acquisition of SMX represents an important step in ICE’s growth trajectory as we look to expand our customer base and markets in Asia by establishing a local exchange and clearing presence,” said David Goone, chief strategy officer at ICE.
“In recent years, Asia-based trading activity in our benchmark energy and interest rate products has been rising as the region increases in importance in global markets,” he added. “ICE has had a presence in Singapore for over a decade and today’s announcement is a natural evolution of our strategy to further extend our network of markets across the globe.”
Following the closing of the deal, the SMX and SMXCC will transition from their existing technology to the ICE trading and clearing platforms. The SMX will continue to be based in Singapore and operate as a separate recognized body with its own independent board of directors.