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Climate Exchange, the UK-listed operator of US and European carbon emissions trading platforms, was Friday set to be bought up by IntercontinentalExchange (ICE) after its board recommended a cash offer from the US exchange operator valuing the group at US$604M.

The deal is a bold move by Atlanta-based ICE, into emissions trading after a string of acquisitions that have built the business into one of the world’s largest energy and commodity trading business.
ICE’s last strike on a London business was in Y 2001, when it bought the International Petroleum Exchange, home to world trading in Brent Crude Oil.

The deal makes sense for both the Chicago Climate Exchange (CCX), the US unit of Climate Exchange, and ICE, which have become increasingly close in recent years.

ICE last year took a 4.8% stake in CLE, whose chairman, Richard Sandor, sits on ICE’s board. ICE has also been providing clearing and execution services for CCX.

The purchase by ICE of its 4.8% stake in CLE was at 644p a share. Friday’s offer for the remaining shares was at 750p a share.

Climate Exchange has three main businesses: European Climate Ex-change, which trades certificates for mandatory European Emissions Trading Scheme; Chicago Climate Exchange, which operates the world’s first voluntary cap-and-trade system for greenhouse gas emissions reductions; and the Chicago Climate Futures Exchange, a regulated exchange in the US for environmental futures contracts.

CCX was founded in 2001 by Richard Sandor, a former economist at the Chicago Board of Trade credited with pioneering the cap-and-trade business in the US and later abroad.

Jeff Sprecher, ICE chief executive and founder, said: “The combination of Climate Exchange’s emissions markets and ICE’s futures and OTC energy markets is an important and logical strategic combination. —Paul A. Ebeling, Jnr. www.livetradingnews.com