Shearman & Sterling is advising ICE (IntercontinentalExchange, Inc), which operates various futures exchanges, clearing houses and over-the-counter markets, on its proposed £395 million acquisition of Climate Exchange plc (ECX). ECX operates various exchanges and other companies that facilitate trading in environmental-related financial instruments, including futures on carbon emissions allowances. The trading of these instruments is an important part of global initiatives to reduce carbon emissions and global warming. The marketability of emissions allowances results in unused allowances having economic value, so these instruments financially incentivise polluters to reduce their emissions.
ICE Futures is currently the exchange for the climate-related futures contracts designed by ECX. Clearing houses in the ICE group (The Clearing Corporation and ICE Clear Europe) clear these and other markets operated by the ECX group. When completed, the deal is expected to enhance ICE’s leading position as a venue for the trading and clearing of global carbon derivatives. The takeover is likely to be finalised by the end of July 2010.
The Shearman & Sterling team is advising ICE on all aspects of the takeover which is being effected by way of a scheme of arrangement. The transaction includes assets in 5 jurisdictions. Amongst them are the European Climate Exchange, Chicago Climate Exchange and the Chicago Climate Futures Exchange.
Shearman & Sterling has also recently advised ICE on a number of high-profile instructions, including the establishment of ICE Clear Europe, the first successful new derivatives clearing house in the UK since 1880, and the launching of clearing for credit default swaps by ICE Trust U.S. and ICE Clear Europe. This innovative work has been recognised in a string of industry and legal awards.
The Shearman & Sterling team of lawyers in the firm’s London office is being led by M&A partner Lois Moore. She is being assisted by M&A associates Lucy Graham and Emi Zakrzewski. Competition law advice is being provided by partner Matthew Readings and counsel Antonia Horrocks. Partners Barney Reynolds and Geoff Goldman (New York-Asset Management) and associate Thomas Donegan are advising on financial regulatory issues. Counsel Deborah Lincoln is advising on intellectual property related issues, and counsel Sam Whitaker is advising on executive compensation and employee benefits aspects of the transaction.