TMX Group Completes Acquisition of ICE’s Trayport for ‎£550 million‎

ICE was told for the third time that it must sell Trayport, which it acquired for $650 million in 2015.

Intercontinental Exchange Inc., which owns futures markets and the New York ‎Stock Exchange, today completed the sale of the broker-tech platform licenser Trayport to TMX Group Limited, operator of the Toronto Stock Exchange and another four marketplaces.

The terms of the sale, agreed in October 2017, include a payment of £550 million ($721.2 million), of which £350 million in cash and £200 million in exchange for selling ‎Natural Gas Exchange (NGX) and Shorcan Energy Brokers (Shorcan ‎Energy) to ICE‎.

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The sale of the energy trading technology ‎shop was approved by the UK competition authority (CMA), and also acquiring NGX and Shorcan Energy was subject to additional regulatory approvals.

The acquisition of Trayport brings a new set of product development, data, analytics and sales talents to TMX and strengthens its global data and analytics business. The transaction also leverages Trayport’s proven expertise to‎ accelerate TMX’s global expansion and increase the portion of its revenue from recurring sources.

As part of Canada’s bourse operator, Trayport will continue to serve its customers, which include energy producers and consumers, brokers, exchanges and clearing houses, with its existing technology platform.

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Earlier in July, ICE was told for the third time that it must sell Trayport, the energy trading technology shop it acquired for $650 million in December 2015. The UK Competition and Markets Authority (CMA) selected the forced sale option to reverse ICE’s takeover of Trayport, as the watchdog decided that the deal undermines competition.

The independent group rejected alternative remedial actions, such as forcing Trayport to offer better terms to customers, concluding that it would not be effective.

In 2016, the CMA highlighted that ICE’s investment in Trayport could hurt competition for wholesale European utilities trades, where Trayport’s software helps facilitate 85 percent of activities. It also voiced concerns of possibly worse terms for traders due to higher fees for executing and clearing trades.

Other market participants, such as Nasdaq, EEX, Tradition and ICAP, have told CMA that they fear that OTC gas and power markets could be subject to the mandatory clearing provisions that are being applied to other commodity markets.

Commenting on the deal, Ben Jackson, ICE President, said: “The addition of NGX’s products and clearing services offers our customers an expanded range of energy products and risk management solutions across physical and financially-settled markets. Shorcan’s brokerage business complements our global oil complex, which includes deep liquidity on the leading trading platform for oil markets.”

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