SGX enters exclusive talks to snap up Baltic Exchange

The exclusivity expires on 30 June.

Singapore Exchange Limited (SGX) is eyeing expansion, and has recently unveiled that it has inked an exclusivity agreement for the acquisition of The Baltic Exchange Limited (Baltic Exchange).

According to the bourse’s announcement, the deal will have SGX and the Baltic Exchanges enter into exclusive discussions regarding SGX’s cash offer for 100% of the share capital of the Baltic Exchange.

The proposal includes keeping the Baltic Exchange’s headquarter in St Mary Axe, London; maintaining the existing benchmark production and governance model; as well as keeping end-user Baltic data fees and fees for SGX clearing of freight derivatives at current levels for at least five years. Further, the proposal also includes a commitment to the multiple clearing house model.

In addition, SGX will seek to boost the relationship between the Baltic Exchange and its contributing panellists, and will provide a commitment to the future business of freight derivative brokers.

This deal follows SGX’s announcement in February 2016 that it had submitted a non-binding bid for the acquisition of the Baltic Exchange. The period of exclusivity will last until 30 June 2016.

The Baltic Exchange and SGX will together discuss the offer with Baltic Exchange shareholders, as well as the wider stakeholder community, over a number of weeks. SGX underscores, though, that there is no guarantee that inking the exclusivity deal will lead to definitive deals or completion of the transaction.