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IntercontinentalExchange, Inc. (NYSE: ICE), the leading electronic energy marketplace and soft commodity exchange, announced that it has entered into a definitive agreement to acquire ChemConnect, Inc.'s commodity trading business. ChemConnect is the leading electronic marketplace for the $150 billion U.S. natural gas liquids (NGLs) and chemicals markets. Utilized by the world's largest producers and consumers of NGLs and chemicals, ChemConnect has established a 10-year track record in expanding the markets for such products and providing hedging opportunities for its market participants through specialized products and services.
ChemConnect's NGL markets include widely-used products such as propane and ethane, while its chemicals business includes commodities such as ethylene, propylene and benzene. ChemConnect will transition its electronic markets to the ICE electronic trading platform where both ICE and ChemConnect customers will benefit from a more comprehensive product offering in a single marketplace. NGL prices are correlated with natural gas and crude oil prices, making these products a natural extension to those products currently offered on the ICE platform.
"This strategic and accretive acquisition builds on ICE's commitment to serving the physical OTC energy markets by increasing access and transparency through electronic trading," said Charles A. Vice, ICE President and Chief Operating Officer. "We are pleased to welcome the ChemConnect team and their diverse customer base. The acquisition of the leading electronic physical NGL and chemicals trading platform is an excellent fit with our leadership in the U.S. physical gas and power markets, as well as our upcoming launch of the Platts Window on ICE for the global physical oil markets."
Formed in 1995 by a group of leading energy and chemical industry participants, ChemConnect is based in Houston, Texas. ICE expects to transition ChemConnect's products and customers to the ICE platform, as well as transition the ChemConnect data business to ICE Data during the same period. The all-cash transaction is expected to be completed by the middle of July, and the terms of the transaction have not been disclosed.
