EU said to raise no objections to ICE takeover of NYSE Euronext

June 17, 2013 07:09 PM
Formal approval still forthcoming

European antitrust regulators have lodged no objections to IntercontinentalExchange Inc.’s takeover of NYSE Euronext as a decision on the transaction approaches, according to a person with direct knowledge of the matter.

While formal approval of the deal, which would give ICE control of NYSE’s Liffe derivatives exchange in London, hasn’t been issued, antitrust officials have communicated no opposition to the companies, according to a person, who asked not to be identified because the review is private. A decision from the European Commission is expected by June 24, the person said. Shareholders of both companies approved the transaction, which values NYSE at $10.2 billion, on June 3.

Kelly Loeffler, spokeswoman for ICE, and Richard Adamonis, spokesman for the NYSE, declined to comment on the approval process. Antoine Colombani, a spokesman for the European antitrust watchdog, declined to comment. Reuters reported earlier that regulators were poised to clear the deal.

European regulators last month asked users if ICE’s plan to buy NYSE Euronext would reduce competition in soft-commodities markets amid concern among traders over fees and trading hours. The European Commission sought feedback on the impact forderivatives on cocoa, coffee, sugar and rapeseed and U.S. equity-index futures, according to a survey with more than 90 questions obtained by Bloomberg News.

The survey asked clients of ICE and NYSE Euronext about fees for trading and clearing and the impact on collateral. It inquires whether respondents also trade on CME, the world’s largest futures exchange, which competes with both ICE and NYSE Euronext.

Futures Competition

Atlanta-based ICE offers futures contracts tracking cocoa, arabica coffee and raw sugar. NYSE’s London-based Liffe derivativesexchange also offers trading in cocoa, along with contracts on refined sugar and robusta coffee.

The acquisition by ICE Chief Executive Officer Jeffrey Sprecher shows how fast the American trading landscape been transformed in the past decade amid regulation to spur competition and the emergence of electronic markets. The NYSE, which along with the Nasdaq Stock Market handled almost all U.S. share transactions for most of its history, now accounts for less than 30 percent.

Shares of NYSE Euronext increased 2.7 percent to $41.59 at 1:09 p.m. New York time, bringing the increase since merger talks were reported on Dec. 19 to 73 percent. IntercontinentalExchange, known as ICE, rose 3.5 to $179. bringing the advance to 40 percent.

Shareholder Votes

The takeover was ratified by 99.7 percent of shares voted at a special meeting of ICE and about 99 percent at NYSE, according to statements.

The proposal follows more than two years in which almost no deals were completed amid a global wave of proposed buyouts that exceeded $30 billion worth of offers. European regulators blocked the acquisition of NYSE Euronext by Deutsche Boerse AG in February 2012 while a bid by Singapore Exchange Ltd. for Australia’s market operator was rejected by the government.

ICE, which bought the New York Board of Trade in 2007 and renamed it ICE Futures U.S., has said it will keep the NYSE Euronext brand. The merged company will maintain dual headquarters in Atlanta and New York.

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