US stock exchange operator says it will buy Singapore's SMX exchange

US stock exchange operator says it will buy Singapore's SMX exchange
Intercontinentalexchange Chairman and CEO Jeffrey Sprecher (C) and company executives prepare to ring the opening bell at the New York Stock Exchange

NEW YORK CITY - US stock exchange operator ICE, which just concluded its acquisition of NYSE-Euronext, said Tuesday it will buy the Singapore Mercantile Exchange in an all-cash transaction.

The price of the deal, the second big step by ICE within a week, was not disclosed.

SMX runs futures markets in Singapore in metals, currencies, energy and farm commodities.

The deal is expected to close by the end of 2013, pending regulatory approvals and closing conditions, ICE said in a statement.

ICE, which stands for Intercontinental Exchange Group, has just completed a huge deal to buy the New York Stock Exchange and the European Euronext market in what it presented as a game-changing move to create a global markets giant.

SMX is a wholly owned subsidiary of Financial Technologies (India) Ltd.

ICE said that once the deal with the SMX was completed, it expected a period of business transition in which ICE will implement technology changes.

In consultation with market participants, clearing members, and regulators, it will evaluate the product and clearing strategy of SMX to ensure the offering meets market participants' needs in the region," the statement said.

David Goone, Chief Strategy Officer at ICE, said: "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."

He added: "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.

"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."

Last week ICE created a global financial market giant by taking over US-European stock market operator NYSE Euronext for $11.0 billion (8.2 billion euros).

The ambitious move by a relative newcomer ended nearly two centuries of independence by the New York Stock Exchange, and signaled the likely spin-off of Euronext.

ICE said that that deal "creates the premier operator of global exchanges."

The statement last week said that the group had a market value of $23 billion, operated in 16 exchanges and five central clearing houses.

ICE and NYSE Euronext are to continue to operate under their own brands, but ICE repeated that it expected to float Euronext off in an initial public offering (IPO).

Euronext operates a number of European markets, including the Paris stock market from which it originates.

ICE launched its bid for NYSE Euronext in December 2012 and the deal was to have been completed by November 4. But it had to be delayed awaiting some regulatory authorisations.

ICE is based in Atlanta, Georgia and specialises in raw materials and in financial instruments based on the foreign exchange market and on interest rates.

It was created in 2000.

In recent years there has been a strong trend of consolidation, or alliances, between the business which run financial markets.

The announcement of the deal with SMX, following so soon after the NYSE Euronext takeover, signals the aggressive ambitions of ICE.

The deal last week meant that this young company is buying a grand institution in New York. The NYSE was created at the end of the 18th century and has been called the New York Stock Exchange since 1863.

That deal meant that ICE wins control of Liffe, the London financial futures market which had been acquired previously by Euronext and is considered to be a jewel in the group.

But ICE wants to spin off Euronext as the operator of stock markets in Paris, Brussels, Amsterdam and Lisbon, and the IPO is expected in 2014 subject to details yet to be published.

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