Derivatives exchange Eurex intends to intensify its cooperation with the European Energy Exchange.
The objective is to further strengthen Leipzig as a European centre of expertise for energy and emissions products.
In line with this, Eurex and Landesbank Baden-Württemberg have concluded an agreement that will allow Eurex to acquire LBBW’s stake in the EEX.
Eurex currently holds a 35.2 per cent stake in the EEX.
Eurex and the EEX have been cooperating in the trading and clearing of emissions rights and power derivatives since December 2007.
“By expanding our stake we are going to improve EEX’s position in European energy trading through close coordination of our product development and sales activities. At the same time we are strengthening our presence in the commodity markets, as financial and commodities markets are growing ever more closely together,” says Peter Reitz, member of the Eurex executive board responsible for product and business development.
The agreement concluded between Eurex Zürich and LBBW foresees that Eurex will acquire LBBW’s stake of up to 22.96 per cent in the European Energy Exchange. The shares are to be transferred at a price of EUR7.15 per share plus a premium of EUR0.60 in the event that Eurex Zürich becomes the majority shareholder.
If Eurex acquires all LBBW’s shares, the maximum purchase price for the shares would be EUR71.3m. However, under the pre-emption rights laid out in the consortium agreement, LBBW is obligated to offer its shares on a pro rata basis to other EEX shareholders. This means that Eurex will acquire at least 10.7 per cent of the EEX in this process for a purchase price of EUR30.7m.
According to the economic participation in Eurex, Deutsche Börse will fund 85 per cent of the purchase price. Deutsche Börse will finance its share of the purchase price through cash on hand.
In order to strengthen EEX’s competitive position, Eurex aims to secure existing jobs at the EEX and to expand Leipzig as a centre of expertise for energy products. In addition, it is planned that the EEX will use Eurex’s international locations in Europe, America and Asia and benefit from Eurex’s global member network.
The transaction is expected to be completed in the second quarter of 2011 and requires the approval of the German Competition Authority (Bundeskartellamt) and the Supervisory Board of Eurex Zürich and other internal boards. The EEX Supervisory Board must also approve the transfer of the LBBW shares.
