InterContinental Exchange has agreed to buy fixed-income trading platform MarketAxess Holdings for approximately $5.7 billion in cash, ending years of quiet strategic alignment between the two companies and moving credit markets another step toward consolidation.
ICE will pay $167 per MarketAxess share, a 33% premium to the stock’s last closing price before the announcement. Once the two companies merge, they will combine pre-trade analytics, electronic execution and post-trade compliance into a single platform for institutional fixed income traders.
From data partner to platform owner
The deal ends a relationship that was already deep. ICE and MarketAxess have linked their liquidity pools and worked together on products such as MSCI-linked ICE futures MarketAxess Corporate bond indices.
Purchasing MarketAxess outright gives ICE direct ownership of the implementation layer behind those products. This means controlling one of the largest comprehensive corporate bond trading venues in the world, side by side ICE’s current business In interest rate derivatives and fixed income data.
“Together we will build the fixed income ecosystem that investors have always deserved – one that is transparent, efficient, fully connected and available to everyone,” said Jeff Sprecher, CEO of ICE.
ICE is moving from a position of strength. The exchange group reported net income of $958 million for the quarter, helped by a jump in hedging activity as geopolitical risks and changing price expectations led to higher trading volumes across its markets.
Average daily volume of interest rates rose 24% year over year, agriculture and metals volumes rose 36%, and fixed income and data services revenues grew 8%.
The next stage of credit market consolidation
This acquisition strengthens ICE’s position across the fixed income trading portfolio, from market data and analytics to execution and post-trade services.
For brokers and infrastructure providers, it is another sign that the largest exchange groups in the industry are vying to own entire trading workflows rather than individual products.
As more of this infrastructure comes under exchange ownership, independent providers will face increasing pressure to differentiate through niche products or partnerships.
InterContinental Exchange has agreed to buy fixed-income trading platform MarketAxess Holdings for approximately $5.7 billion in cash, ending years of quiet strategic alignment between the two companies and moving credit markets another step toward consolidation.
ICE will pay $167 per MarketAxess share, a 33% premium to the stock’s last closing price before the announcement. Once the two companies merge, they will combine pre-trade analytics, electronic execution and post-trade compliance into a single platform for institutional fixed income traders.
From data partner to platform owner
The deal ends a relationship that was already deep. ICE and MarketAxess have linked their liquidity pools and worked together on products such as MSCI-linked ICE futures MarketAxess Corporate bond indices.
Purchasing MarketAxess outright gives ICE direct ownership of the implementation layer behind those products. This means controlling one of the largest comprehensive corporate bond trading venues in the world, side by side ICE’s current business In interest rate derivatives and fixed income data.
“Together we will build the fixed income ecosystem that investors have always deserved – one that is transparent, efficient, fully connected and available to everyone,” said Jeff Sprecher, CEO of ICE.
ICE is moving from a position of strength. The exchange group reported net income of $958 million for the quarter, helped by a jump in hedging activity as geopolitical risks and changing price expectations led to higher trading volumes across its markets.
Average daily volume of interest rates rose 24% year over year, agriculture and metals volumes rose 36%, and fixed income and data services revenues grew 8%.
The next stage of credit market consolidation
This acquisition strengthens ICE’s position across the fixed income trading portfolio, from market data and analytics to execution and post-trade services.
For brokers and infrastructure providers, it is another sign that the largest exchange groups in the industry are vying to own entire trading workflows rather than individual products.
As more of this infrastructure comes under exchange ownership, independent providers will face increasing pressure to differentiate through niche products or partnerships.
