ICE to sell Trayport after losing UK competition watchdog appeal

NEW YORK (Reuters) - Intercontinental Exchange Inc ICE.N said it will sell energy trading software firm Trayport after losing an appeal of a decision by Britain's competition watchdog calling for the divestment to preserve competition in the utility derivatives trading industry.

The Competition and Markets Authority said on Friday that ICE’s control of Trayport, which the exchange and clearinghouse operator bought in late 2015 for $650 million in stock, would result in a “substantial lessening of competition” in two markets. The CMA said the only effective remedy would be the total divestiture of Trayport by ICE.

ICE said it was “disappointed” be the decision.

“Nonetheless, we will now complete the CMA process, terminate the agreement as instructed and move forward with the divestment of Trayport expeditiously so that Trayport’s future ownership is resolved,” the New York Stock Exchange owner said in a statement.

ICE is the biggest European utilities exchange operator, while London-based Trayport’s software underpins over 85 percent of European utilities trading, the CMA said.

ICE could use Trayport’s platform to reduce competition between itself and its rivals, leading to increased fees for execution and clearing, and a worsening of terms offered to traders, the regulator said. It would not be possible to run the two businesses at arm’s length from each other, the CMA added.

Reporting by John McCrank, editing by G Crosse