ICE Announces Definitive Agreement to Acquire Winnipeg Commodity Exchange
ATLANTA, GA (June 22, 2007) –IntercontinentalExchange, Inc. (NYSE: ICE), the leading electronic energy marketplace and soft commodity exchange, announced that it has entered into a definitive agreement to acquire the Winnipeg Commodity Exchange (WCE), the leading agricultural commodity futures and options exchange in Canada and home to the world’s leading canola futures contract. The acquisition of the WCE and its agricultural product suite will complement ICE’s January 2007 acquisition of the New York Board of Trade (NYBOT), the world’s leading marketplace for soft commodity contracts.
The WCE currently has an electronic trading services agreement with the Chicago Board of Trade. The exchange owns its own clearing house, as well as a physical delivery structure for its commodity products. Subject to any necessary regulatory approvals, ICE expects to transition trading in WCE’s markets to the ICE electronic platform and to transition the clearing systems to ICE Clear USsm, within the WCE Clearing Corporation regulatory framework. The transition of WCE’s markets to ICE’s electronic trading platform and conversion to ICE Clear technology platform is expected to be completed during the fourth quarter. ICE will maintain all existing WCE staff at the location in Winnipeg under the terms of the agreement.
“We are pleased to announce this agreement with Canada ’s leading regulated agriculture exchange as we continue the expansion of ICE global futures and over-the-counter markets,” said ICE Chairman and CEO Jeffrey C. Sprecher. “The addition of Winnipeg ’s markets further enhances our agricultural product offering. This franchise brings to ICE a Canadian-based regulated futures exchange and clearing house from which we can develop additional derivative trading and clearing opportunities based on the Canadian markets which are rich in natural resources. We look forward to working with the Canadian staff and regulatory authorities to close this transaction.”
The WCE Canola futures contract is the leading canola contract in the world, with 2.6 million contracts traded last year. The WCE also trades Western Barley futures and Feed Wheat futures. The WCE traces its roots back to 1887, with the founding of the Winnipeg Grain and Produce Exchange. Trading in futures contracts in wheat, oats and flaxseed began in 1904. A futures market for rapeseed (also known as canola) was launched in 1963. Options on WCE Canola futures were introduced in 1991. Trading volume at the WCE has increased steadily since the transition to electronic trading in 2004, including a 35% increase in contracts traded in 2006.
WCE Holdings Inc. owns the Winnipeg Commodity Exchange Inc., the WCE Clearing Corporation, the Canadian Climate Exchange Inc., and the WCE Industry Services Corporation.
The purchase price for the transaction is $62.08 (Canadian dollars) per common share or $40 million Canadian in the aggregate. The transaction is proceeding by way of plan of arrangement and is subject to approval of WCE shareholders, approval of the Manitoba Securities Commission, which serves as the exchange’s primary regulator, and other conditions which are customary in transactions of this nature. Upon the close of the transaction, WCE will be a wholly-owned subsidiary of ICE. ICE expects to close the transaction in the third quarter of 2007. |
