Energy trader acquires London-based Climate Exchange plc

A major US-based energy and futures trader has acquired Climate Exchange plc, which trades in the emissions of greenhouse gases, for £395 million.

IntercontinentalExchange (ICE), headquartered in Atlanta, operates marketplaces that trade in energy and commodity futures and other financial products. Led by Richard Sandor, the London-based Climate Exchange operates the European Climate Exchange (ECX), the Chicago Climate Exchange (CCX) and the Chicago Climate Futures Exchange (CCFE).

“The combination of Climate Exchange’s emissions markets and ICE’s futures and OTC (over-the-counter) energy markets is an important and logical strategic combination for our customers and shareholders, and clearly an exciting opportunity for ICE to grow and further diversify our revenues,” said Jeffrey C. Sprecher, ICE’s chairman and CEO. “ICE has been a partner with Climate Exchange and Dr. Sandor since 2003, and we have worked together toward the development and expansion of the emissions markets.”

Sprecher added, “The leadership that Climate Exchange has shown in establishing market standards in Europe, and increasingly the US and Asia, has driven its success, and we see continued growth opportunities within these nascent markets globally.”

“The development of our Company from initial concept to its leadership role in global environmental markets is a tribute to the vision and efforts of our entire team,” said Sandor. “We believe that a combination with ICE makes strategic sense and look forward to addressing continued opportunities together. ICE has committed to further developing the Climate Exchange businesses and building on our joint track record of innovation and success to the benefit of our customers across futures and OTC markets in Europe, Asia and the US.”

ICE and its affiliates currently have multiple contracts in place with Climate Exchange and its affiliates to provide technology and clearing services. These contracts include agreements for ICE to provide an electronic trading platform and clearing to ECX for European emissions trading, an electronic trading platform to CCX for US emissions trading and clearing for CCX’s US emissions markets. Through those agreements, ICE charges fees to Climate Exchange for the services provided and shares in the revenue with respect to the trading and clearing of emissions contracts.

The transaction announced today remains subject to relevant regulatory approvals.