What Is the Intercontinental Exchange (ICE)

The Intercontinental Exchange (ICE) was founded in May 2000 in Atlanta, Georgia, to facilitate the electronic purchase and sale of energy commodities. ICE operates entirely as an electronic exchange and is linked directly to individuals and companies looking to trade in oil, natural gas, jet fuel, emissions, electric power, commodity derivatives, and futures.

Understanding the Intercontinental Exchange (ICE)

The Intercontinental Exchange has been at the forefront of the commodities exchange market since its founding. The ICE network offers companies the ability to trade energy commodities with another company around the clock and spans the globe. It also facilitates the trading of foreign exchange and interest rate products, including credit default swaps.

ICE bought NYSE Euronext, the parent company of the New York Stock Exchange (NYSE), in 2013. The company spun off the Paris-based European stock exchange operator in June 2014 but retained ownership of NYSE. ICE has grown and diversified since its founding in 2000. It is the third-largest exchange group in the world, behind Hong Kong Exchanges and Clearing and the CME Group, which owns the Chicago Board of Trade and the New York Mercantile Exchange. The company owns 23 regulated exchanges and six clearinghouses around the world.

NYSE Ownership

ICE purchased NYSE Euronext in a deal that was announced in late 2012 and closed the following year. The computerization of trading had diluted the importance of NYSE's trading floor and open outcry system, and its share of the trading volume of companies listed on its exchange had declined to 21% from 82%. The deal was initially valued at $8.4 billion, but that rose to $11 billion by the time it closed in November 2013. Since the acquisition, ICE has operated two U.S. corporate headquarters: Atlanta and New York City.

Bid for London Stock Exchange

In March 2016, ICE announced plans to bid for the London Stock Exchange Group PLC (LSE), which had already been exploring a possible merger with the Frankfurt, Germany-based Deutsche Boerse AG. Deutsche Boerse offered $30 billion in an all-stock bid for 54.4% of the merged company, which would be the largest exchange in Europe. ICE indicated it sought to disrupt that deal with a $15 billion all-cash offer. But ICE walked away from the deal a few months later, leaving Deutsche Boerse open to the takeover. However, EU regulators struck down that deal, saying they couldn't approve the merger between the German and British exchanges.  

The competition to acquire the LSE is influenced by issues of international politics and nationalism, as some in London have objected to the idea of a company central to British finance being owned by Germans. Others have objected to ICE's proposal on the basis a European company should own the LSE.

ICE Data Services

In 2016, the company launched ICE Data Services, which brought together proprietary exchange data, valuations, analytics and connectivity solutions across its exchanges, and offers desktop and trading tools that serve its broad base of customers. That customer base includes financial institutions, asset managers, and individual investors.