Exclusive: ICE to win EU approval for $8.2 billion NYSE bid - sources

Mon Jun 17, 2013 12:58pm EDT
 
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By Foo Yun Chee

BRUSSELS (Reuters) - IntercontinentalExchange (ICE) is set to win unconditional EU approval for its $8.2 billion bid for NYSE Euronext, sources said on Monday, in a deal that would strengthen its presence in the lucrative derivatives trading business.

The acquisition would give ICE (ICE.N: Quote) control of London-based Liffe, Europe's second-largest derivatives market, and help it compete with U.S. rival CME Group. New EU derivatives rules, to be gradually phased in this year, will dramatically expand the demand for clearing over-the-counter contracts.

The deal would also boost ICE's presence in the interest rate futures business. The combined ICE-NYSE Euronext would be the third-largest exchange group globally, behind world No. 1 Hong Kong Exchanges and Clearing (0388.HK: Quote) and CME Group.

The European Commission, which has been assessing the deal since mid-May, will clear it without requiring conditions from ICE as it did not see any competition concerns, two people familiar with the matter said on Monday.

The Commission, the European Union's competition authority, focused on soft commodities derivatives such as coffee, cocoa and sugar, and found that ICE and NYSE Euronext NYX.N dealt in two different types of assets which meant they would not reduce competition after the takeover, said one of the sources.

'NOT CLOSE COMPETITORS'

Regulators also looked at U.S. financial derivatives as NYSE offers U.S. equity index options while ICE deals in U.S. equity index futures.

"The two companies are not close competitors so there are no competition concerns," the source said.   Continued...

 
The NYSE Euronext flag hangs outside the New York Stock Exchange in New York December 20, 2012. REUTERS/Andrew Kelly