Sparks fly as SGX acquires 49% of Energy Market Company

This move marks SGX's debut in the electricity sector.

In a release, Singapore Exchange (SGX) today said it has acquired 49% of Singapore-based Energy Market Company (EMC).

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.

The acquisition marks SGX’s entry into the electricity sector, expanding its current portfolio of energy products and OTC clearing services. SGX will also be well-placed to pioneer electricity and related derivatives.

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 Mr Magnus Böcker, CEO of SGX.

SGX is acquiring this 49% 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, which was completed today, 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.