Eurex plans to expand cooperation with EEX and aims to increase internationalization of the energy exchange
LBBW and Eurex agree takeover of LBBW’s stake in EEX by Eurex/ Strengthening and expansion of Leipzig’s position
Eurex: The international derivatives exchange Eurex intends to intensify its cooperation with the European Energy Exchange (EEX). The objective is to further strengthen Leipzig as a European center of expertise for energy and emissions products. In line with this, Eurex and Landesbank Baden-Württemberg (LBBW) today concluded an agreement that will allow Eurex to acquire LBBW’s stake in the EEX. Eurex currently holds a 35.2-percent 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,” said Peter Reitz, member of the Eurex Executive Board responsible for product and business development.
Today’s agreement concluded between Eurex Zürich AG and LBBW foresees that Eurex will acquire LBBW’s stake of up to 22.96 percent in the European Energy Exchange AG. The shares are to be transferred at a price of €7.15 per share plus a premium of €0.60 in the event that Eurex Zürich AG becomes the majority shareholder. If Eurex acquires all LBBW’s shares, the maximum purchase price for the shares would be €71.3 million. 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 percent of the EEX in this process for a purchase price of €30.7 million. According to the economic participation in Eurex, Deutsche Börse AG will fund 85 percent of the purchase price. Deutsche Börse AG 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 center 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 AG and other internal boards. The EEX Supervisory Board must also approve the transfer of the LBBW shares.
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