Nasdaq OMX enters energy trading fray with acquisition of Nord Pool units

Nasdaq OMX enters energy trading fray with acquisition of Nord Pool units

Nasdaq OMX is to launch a new energy and carbon trading unit after completing the acquisition of Nordic power exchange Nord Pool's clearing, international derivatives and consulting subsidiaries.

The new Nasdaq OMX Commodities division will be based on Nord Pool's energy and carbon derivatives products. Under the deal, the exchange license will still be held by Nord Pool but it will clear through Nasdaq OMX Commodities.

By taking control of Nord Pool's clearing operations, the new division "becomes the world leader in cleared power derivatives volumes," claims Nasdaq OMX.

The division will be led by Nord Pool's senior vice president of projects, Geir Reigstad, who will report to Hans-Ole Jochumsen, EVP, Nasdaq OMX Nordic Transactions Services.

"With Nasdaq OMX Commodities, our intent is to create a global leader in energy derivatives and carbon products," says Bob Greifeld, CEO, Nasdaq OMX. "Combining Nord Pool's footprint in the commodities market with Nasdaq OMX's global distribution capabilities and customer base puts us in a unique position to create a financial centre for energy related derivatives."

Reigstad adds: "Under Nasdaq OMX Commodities we will be very well positioned for the increased competition and consolidation in the global energy market, and have the ability to introduce new products. When integrating our technology platforms, both customer bases will be able gain access to asset classes at each others markets through one single interface, providing efficiency advantages for all our members."

OMX signed a share purchase agreement with Nord Pool back in February and has paid around $325 million for Nord Pool International, Nord Pool Clearing and Nord Pool Consulting. The exchange operator has also agreed to potential further earn-out payments of up to $119 million based on volume over a five year period.

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