Continuing to display its voracious appetite for acquisitions and mergers, Atlanta-based IntercontinentalExchange Inc. (ICE) — an electronic energy marketplace and soft commodity exchange — said Monday it has entered into a definitive agreement to acquire Houston-based ChemConnect Inc.’s commodity trading business.
ChemConnect is the leading electronic marketplace for the $150 billion U.S. natural gas liquids (NGL) and chemicals markets. ChemConnect has established a 10-year track record in expanding the markets for such products and providing hedging opportunities for its market participants through specialized products and services.
ChemConnect’s NGL markets include products such as propane and ethane, while its chemicals business includes commodities such as ethylene, propylene and benzene. Under the terms of the deal, ChemConnect will transition its electronic markets to the ICE electronic trading platform where the companies claim that both ICE and ChemConnect customers will benefit from a more comprehensive product offering in a single marketplace. NGL prices are correlated with natural gas and crude oil prices, which ICE said makes these products a natural extension to those products currently offered on the ICE platform.
“This strategic and accretive acquisition builds on ICE’s commitment to serving the physical OTC energy markets by increasing access and transparency through electronic trading,” said Charles A. Vice, ICE’s president. “We are pleased to welcome the ChemConnect team and their diverse customer base. The acquisition of the leading electronic physical NGL and chemicals trading platform is an excellent fit with our leadership in the U.S. physical gas and power markets, as well as our upcoming launch of the Platts Window on ICE for the global physical oil markets.”
ICE said it expects to transition ChemConnect’s products and customers to the ICE platform, as well as transition the ChemConnect data business to ICE Data during the same period. The all-cash transaction is expected to be completed by the middle of July, and the terms of the transaction have not been disclosed.
ICE has definitely been busy on the acquisition front. After completing its acquisition of the New York Board of Trade in January (see Daily GPI, Jan. 16), the exchange went on to complete a multi-tiered alliance with NGX and a purchase and leaseback of Intelligence Press Inc.’s NGI indexes (see Daily GPI, March 29; April 13). ICE is also competing against the Chicago Mercantile Exchange for wooing rights of the Chicago Board of Trade (see Daily GPI, March 23; June 4).
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