FRANKFURT Germany's energy exchange, part of Deutsche Boerse AG (DB1Gn.DE), has agreed to buy all the shares in U.S. peer Nodal to pursue its global growth strategy, Deutsche Boerse said on Friday.
The European Energy Exchange said (EEX) the overall purchase price was in the low "three digit million dollar range" and the transaction would be completed in the second quarter, pending necessary regulatory approvals.
"Our ultimate ambition for EEX Group is to become a truly global commodity exchange," said Peter Reitz, Chief Executive Officer of EEX. "The acquisition of Nodal Exchange is a major milestone."
Nodal, a futures exchange based in Virginia that launched in 2009, offers 1,000 power and gas contracts for 100 locations and a gas contract for the Henry Hub delivery point, the U.S. gas benchmark location.
Nodal does the bulk of its business in electricity futures, nearly doubling volumes in 2016 after switching to its own clearing house in October 2015 from LCH Clearnet, Chief Executive Paul Cusenza said in a phone interview.
By joining forces, the two exchanges will increase their presence in U.S. gas, which is important for power generation and therefore interlinked, as well as giving their respective trading members access to global energy products, he said.
"They (EEX) are not a competitor, they operate mainly in Europe while we have both the exchange and clearing house in the U.S.. Collectively, we have more global capability," he said.
Cusenza said Nodal, which represented 27 percent of U.S. power market open interest, a liquidity measure, raised its volume turnover 79 percent year-on-year in January and February. It plans to introduce options trading in the second quarter.
Current key shareholders of Nodal include affiliates of Macquarie Energy, DC Energy and NextEra Energy.
Nodal's U.S. competitors are ICE (ICE.N), CME (CME.O), and Nasdaq (NDAQ.O).
The move across the Atlantic is not the first overseas venture for EEX, which last April became the full owner of its Singaporean Cleartrade Exchange (CLTX) subsidiary.
The deal added dry bulk freight, iron ore and bunker fuel contracts to its range of European products which apart from power and gas include carbon emissions certificates and coal.
(Reporting by Vera Eckert; editing by Andreas Cremer and David Clarke)