Euronext is to acquire a majority stake (66%) of Nord Pool group, which runs physical power markets in Europe, valuing the group at €84 million. Euronext said it will enter into a partnership, governed by a shareholder agreement, with the Nordic and Baltic Transmission System Operators (TSOs) that currently own Nord Pool, who will retain a 34% stake through a joint holding company.
Nord Pool group was created in 1993 and offers power trading, clearing, settlement and associated services in both day-ahead and intraday physical energy markets. Nord Pool currently has a strong European foothold with more than 360 customers from 20 countries. The company operates both core intraday and day-ahead markets in the Nordics, Baltics, the UK, France, Germany, Belgium, the Netherlands, Austria and Luxembourg. In 2018, Nord Pool generated c.€40 million4 revenue and 524 TWh were traded on its markets.
Euronext said its strategy was to diversify its revenue mix to new asset classes not correlated with financial market cycles. It will strengthen its commodity franchise by leveraging Nord Pool’s leadership position and know-how in physical power markets. It said Nord Pool will be a pillar of Euronext’s Group centre of excellence for commodities in Oslo. In turn, Nord Pool will benefit from Euronext’s extended footprint and commercial efforts in continental Europe.
The transaction is subject to regulatory and competition approvals and the closing is expected in Q1 2020.
Stéphane Boujnah, chief executive of Euronext, said: “Expanding to the power market is key to Euronext’s mission of financing the real economy. By joining forces with Euronext, Nord Pool will be even better positioned to support the shift to new ways of managing power supply in the face of climate change and the transition to sustainable growth.”
Torger Lien, chair of the Board of Nord Pool, said: “The current owners, the Nordic and Baltic TSOs, are pleased to conclude the ongoing strategic review by entering into a partnership with Euronext for the next phase of Nord Pool’s development. The transaction is a response to the new industry regulation allowing for competition among physical power exchanges, and Euronext, as the new majority owner, is perfectly positioned to drive the development of Nord Pool in a dynamic market environment in the Nordics, the Baltics and across Europe. The TSOs will retain a minority shareholding in Nord Pool, which will continue to be an important part of the Nordic and Baltic power market infrastructure, ensuring price transparency and security of supply.”