Nasdaq Acquires Nord Pool – Analyst Blog

In all, Nasdaq OMX Commodities and Nord Pool ASA will have more than 390 members from 22 countries across a wide range of energy producers, consumers as well as financial institutions.

 

Nord Pool is the world’s largest power derivatives exchange and one of Europe’s largest carbon exchanges operating in all of the Nordic (Denmark, Finland, Norway, Iceland and Sweden) and other European countries. Nord Pool ASA is responsible for the exchange operations and trading activities, including ownership of the Nordic derivative products.

 

In October 2008, Nasdaq acquired Nord Pool Clearing ASA and Nord Pool Consulting AS from Nord Pool ASA. The decision to buy Nord Pool followed the choice of Nord Pool’s previous owners − power grid operators Statnett and Svenska Kraftnat − to exercise their option to sell the shares in the company. This implies that the acquisition is based on a strong justification of combining the power and carbon derivatives exchange and clearing business on the Nord Pool platform. However, this deal is exclusive of the Nordic physical electricity market operated by Nord Pool Spot AS.

 

While the Nord Pool acquisition allows mutually attractive upside opportunities, it will also help broaden the current commodities product range, thereby attracting new financial participants to enhance liquidity and volume.

 

Nasdaq continues to expand its net derivatives trading and clearing exchange platform on a strong base. In December 2008, Nasdaq acquired a majority interest in the International Derivatives Clearing Group (IDCG). In January 2009, the company acquired a 22% stake in European Multilateral Clearing Facility N.V., a leading European clearing house now used for all Nordic transaction services. In January 2010, Nasdaq increased its stake in Agora-X to 85% and on March 8, 2010, the company purchased North American Energy Credit and Clearing Corporation (“NECC”). Together with Nord Pool Spot, Nasdaq Commodities has set up N2EX, the marketplace for physical U.K. power contract.

 

Through the addition of Nord Pool, Nasdaq continues to expand its exchange operations, particularly enhancing its competitive edge over its derivatives-focused rivals CME Group Inc. (CME), IntercontinentalExchange Inc. (ICE) as well as NYSE Euronext Inc.’s (NYSE) NYSE ARCA and NYSE Amex.