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Shareholders Say Yes to Baltic Exchange Takeover

Baltic Exchange

By MarEx 2016-09-26 18:03:30

On Monday, Baltic Exchange shareholders approved a $112 million takeover by Singapore Exchange in a deal giving SGX access to the multi-billion-dollar freight derivatives market.

At its general meeting, 95 percent of those voting, or 228 shareholders, approved the deal. Many of the Baltic's shareholders are in the shipping industry and include ship brokers, companies and individuals.

The takeover, unanimously recommended by the Baltic's board last month, is one of the latest developments in a long string of mergers, bidding wars and failed deals among global exchanges.

SGX is looking to expand its global presence in shipping and has been developing Asian pricing benchmarks for commodities such as iron ore, LNG and coking coal.

"We now look forward to completing the transaction and realizing the growth opportunities as we bring together two important maritime centers," SGX CEO Loh Boon Chye said in a statement.

The deal will need regulatory approval, which shipping industry sources say is likely to be given.

The Baltic also named Mark Jackson its new CEO. Jackson, currently chief commercial officer of AM Nomikos Group and a former chairman and director of the Baltic Exchange, is expected to take up his appointment early in 2017. He replaces the current CEO Jeremy Penn, who last year announced his intention to stand down this summer.

Jackson brings more than 35 years in shipping to his new role. He has worked as a competitive broker, including a period with EA Gibson in London, and for the last 16 years has represented AM Nomikos Group. He was appointed a Director of The Baltic Exchange in 2004 and in 2005 became Chairman of the Freight Indices and Futures Committee. He was elected Vice Chairman of the Baltic Exchange in 2007 and served as Chairman from 2009 until 2012.

Founded in 1744 as a forum for chartering vessels, the Baltic Exchange now produces benchmark indexes for global shipping rates and owns a trading platform for the freight derivatives market.

The Singapore Exchange, started in 1999, made its offer despite freight costs remaining under pressure, after a slump in commodity markets coincided with an increase in the number of vessels.

The Baltic Exchange has been located in the heart of the City of London since its founding in a coffee house. 

The London Metal Exchange, CME Group, ICE, state-run conglomerate China Merchants Group and Platts were among other potential bidders, sources have said previously.