NYSE Euronext has signed an agreement to acquire a 5% shareholding in the Multi Commodity Exchange (MCX), India’s leading commodity marketplace, subject to certain conditions. This is NYSE Euronext’s first investment in a commodity exchange in the Asia-Pacific region.
Five percent is the maximum stake a foreign investor is allowed to own in a derivatives exchange under Indian law. Closing of the transaction is expected to take place during the first half of 2008, subject to all relevant regulatory approvals.
NYSE Euronext says MCX is India’s leading commodity exchange for the trading of precious metals, ferrous and non-ferrous metals, energy, agriculture and industrial commodities. MCX was founded in 2003.
“We believe that our investment in MCX will produce new business opportunities for NYSE Euronext in the commodities sector and deliver value to NYSE Euronext shareholders,” says Duncan Niederauer, NYSE Euronext’s CEO. “This transaction underscores our long-standing commitment to India and is consistent with our strategic business goal of aligning NYSE Euronext with partners globally and diversifying our product portfolio.”
Jignesh Shah, managing director and CEO of MCX adds, “The milestone bears testament to the quality of the institution we have built where the best of India and the world converge. It is a statement on India’s economic standing and we are proud to be part of it.”
In addition to NYSE Euronext, other shareholders in MCX include: State Bank of India and its associates, National Bank for Agriculture and Rural Development, National Stock Exchange of India, SBI Life Insurance Company, Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, Fid Fund (Mauritius) – an affiliate of Fidelity International, ICICI Ventures, IL&FS, Kotak group, Citibank, Merrill Lynch and Financial Technologies.