ICE Wins EU Formal Antitrust Approval to Buy NYSE Euronext

IntercontinentalExchange Inc. won European Union approval to take over NYSE Euronext without conditions after EU regulators said the deal wouldn’t harm competition for derivatives trading and clearing services.

The European Commission in Brussels said it approved the tie up after a review that focused largely on competition for exchange-traded agricultural and soft commodities derivatives as well as U.S. equity index instruments.

“The commission’s investigation confirmed that the proposed transaction would not raise competition concerns as NYX and ICE are not direct competitors in the markets concerned and would continue to face competition from a number of other competitors,” the EU regulator said in a state.

ICE, the energy and commodity futures bourse, agreed on Dec. 21 to acquire NYSE Euronext for cash and stock totaling $8.2 billion at the time. Shareholders of both companies approved the transaction on June 3. The deal means ICE is a step closer to gaining control of Liffe, Europe’s second-largest derivatives market. EU regulators blocked Deutsche Boerse AG’s purchase of NYSE last year, citing concern over competition in derivatives and clearing.

Merging NYSE Euronext, which owns the biggest exchanges by value of listings in the U.S., France and the Netherlands, with the second-largest futures market underscores both the growing importance of derivatives and the diminishing influence of the NYSE, founded more than two centuries ago. ICE plans to spin off Euronext, the Continental European equity markets of NYSE.

‘No Surprise’

“It’s no surprise,” Thomas Kloet, chief executive officer of TMX Group Inc., owner of Canada’s stock and derivatives exchanges and clearinghouse, said in an interview in London today. “We didn’t see significant areas of competition concern given the diversification.” TMX’s plan to merge with London Stock Exchange Group Plc collapsed in 2011.

“With this deal ICE will enter some principal businesses like U.S. equities. The most interesting question now is what happens with Euronext,” said Kloet.

Jeffrey Sprecher, CEO of IntercontinentalExchange, will head the combined company.

Sprecher said in an e-mailed statement he welcomed today’s decision and that the company “will continue to work with the relevant national regulators during the process of reviewing and completing the transaction.”

The approval is “a significant step forward in completing our compelling combination,” Duncan Niederauer, CEO of NYSE Euronext, said in a separate statement.

Volatile Markets

Populist outcry, antitrust concern and some of the most volatile markets on record have prevented the completion of more than $32 billion in announced transactions, according to data compiled by Bloomberg on deals since October 2010 that were valued at $1 billion or more.

Discussions that led to the takeover agreement began in October 2012.

ICE-NYSE overcame concerns from European regulators who 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 commission had sought feedback on the impact for derivatives 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.

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.