) have been on an uptrend since ICE and
NYSE Euronext Inc.
) jointly declared that they have set the closing date for the
acquisition of NYSE Euronext by ICE for Nov 4, 2013. Shares of
ICE shored up 1.3% to $195.66 on Oct 14. The deal is subject to
the remaining approvals from the European regulators and might be
extended if any necessary approvals remain pending on that
The transaction was first announced on Dec 20, 2012, whereby
IntercontinentalExchange had decided to acquire NYSE Euronext for
a purchase consideration of $8.2 billion or $33.12 per share. Of
the entire $8.2 billion, 67% or approximately $5.5 billion is in
shares and the remaining 33% or nearly $2.7 billion is in cash.
The deal was scheduled to culminate in the first half of 2013 and
had been pending approval on many fronts.
The deal was being scrutinized by the European Union Comission
(EUC), particularly, in terms of the effect of the merger on
agricultural and soft commodity derivatives along with U.S.
equity derivatives. In Jun 2013, the deal received a green
signal from the EUC, making the NYSE
Euronext-IntercontinentalExchange merger the third largest global
exchange after the Hong Kong Exchanges and Clearing and
CME Group Inc.
). Later, in Jul 2013, 43 member firms and 75 million contract
sides of NYSE Euronext were transferred to ICE Clear Europe, a
wholly owned subsidiary of IntercontinentalExchange.
Earlier this month, IntercontinentalExchange issued long-term
notes worth $1.4 billion to finance the aforementioned deal. The
first set comprised $600 million worth of notes at an interest
rate of 2.5%. These notes are slated to mature in 2018. The
remaining $800 million worth of notes bore an interest rate of
4.0% and are due to mature in 2023. Both the 5-year and 10-year
notes, along with IntercontinentalExchange's $1.8 billion of
revolving credit facility and $1.0 billion cash, will be used to
fund the cash component of NYSE acquisition. Concurrently,
Moody's Investor Service, the credit rating agency of
) assigned an "A3" rating on the senior debt of the holding
company of IntercontinentalExchange, with a stable outlook.
IntercontinentalExchange carries a Zacks Rank #3 (Hold).
CME GROUP INC (CME): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis
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