SGX Enters Electricity Market, Acquires 49-Per cent Stake in Energy Market Company

Singapore Exchange (SGX) Monday said it has acquired 49 per cent of Singapore-based Energy Market Company (EMC).

SGX is acquiring the stake from M-Co (The MarketPlace Company) Pte Limited, for a consideration of S$17.64 million and a deferred consideration of up to S$2 million over three years, subject to certain conditions being met.

The acquisition marks the bourse’s entry into the electricity sector, expanding its current portfolio of energy products and OTC clearing services. SGX said this acquisition will also enable it to pioneer electricity and related derivatives.

EMC is the operator of the National Electricity Market of Singapore (NEMS), the local market for wholesale electricity trading and the first such liberalised market in Asia. Wholesale electricity in Singapore is bought and sold through the NEMS.

Despite the huge stake in the company, SGX said EMC will continue to run independently with its own board and management.

“The stake in EMC affirms our commitment towards building a leading presence in the energy and commodities market. The demand for electricity and energy products will increase in line with Asia’s growth and this acquisition will position SGX to take advantage of these opportunities,” said Magnus Böcker, CEO of SGX.

The acquisition is expected to have a marginal positive impact on SGX’s net tangible assets and earnings per share for the financial year ending 30 June 2013.