ICE buys Singapore Mercantile Exchange to serve as Asian hub

IntercontinentalExchange said on Tuesday it would buy the Singapore Mercantile Exchange (SMX) in a US$150 million deal that gives it a foothold in trading and clearing in Asia, the main engine of growth for the commodities market.

ICE said it would buy the operation from embattled Indian trading platform provider Financial Technologies (India), less than a week after closing its US$11 billion takeover of NYSE Euronext.

“Events and circumstances led to an opportunity for us to acquire it, and we jumped on it,” ICE chief executive Jeff Sprecher said on a call with analysts.

SMX operates futures markets in Singapore across metals, currencies, energy and agriculture but has attracted limited volumes since it started in 2010.

ICE is not actually interested in the existing business, which is losing money, but rather in buying the ability to offer and clear trading in Asia, Sprecher said.

“We are really buying the infrastructure and the fact that we would avoid a three-year process if we were to start on our own, and the fact that it’s not particularly easy in Asia for a Western company to start an exchange and clearing infrastructure,” he said.