Full steam ahead on NYSE Euronext integration: ICE
IntercontinentalExchange, which last week completed its acquisition of NYSE Euronext, held a teleconference Tuesday morning to update investors on the integration process.
Earlier, they had announced the acquisition of the Singapore Mercantile Exchange for $150 million, a commodity and currency derivatives exchange, expected to close by the end of 2013.
The new ICE consists of 17 exchanges and 6 clearinghouses in 8 countries.
The combined company is largely a futures company consisting of the following assets:
Exchange traded derivatives 46%
Cash equities trading 6%
Market data 13%
Highlights of the call
Euronext: Its spinoff/initial public offering is tentatively scheduled for summer 2014. The first priority is to separate Liffe (London International Financial Futures and Options Exchange) from the Euronext. Liffe is the European derivatives business, which ICE will be keeping. Euronext is the European equity exchanges which ICE acquired in the NYSE deal, including the exchanges in Lisbon, Amsterdam, France, and Brussels.
That separation is expected to be completed by the first quarter of 2014. ICE has already announced their intention to IPO Euronext once a separation is completed; however ICE will retain a stake in Euronext for a period of time after the offering. The IPO should be completed by the summer of 2014.
Higher expense synergies: the original target of $450 million in expense synergies have been increased to $500 million. ICE announced they had already achieved synergies of $95 million through the third quarter of 2103. The remaining $405 million in will come from: 1) corporate integration (restructuring), $155 million, 2) Liffe integration, $100 million, and 3) other business/portfolio rationalization of $150 million.
Sale of businesses: ICE announced that they would be selling parts of the NYSE technology businesses, including NYFIX, Appia, and financial software Wombat.
U.S. equities business: it's now only five percent of the combined revenues of the company, but the focus will be on "market structure improvements." CEO Jeff Sprecher has already indicated he would like to see changes in the maker/taker market structure, whereby exchanges pay for traders to provide liquidity, and change them when they "take" liquidity.
Listings: These are now 12 percent of revenues, and growing. They are #1 in global IPOs and follow-on proceeds, more than the next four exchanges combined.
—By CNBC's Bob Pisani