(Reuters) - Financial and commodity markets operator Intercontinental Exchange (ICE) (N:ICE) said on Thursday that British competition authorities' concerns about its $650 million (494 million pounds) takeover of Trayport were not justified.
The Competition and Markets Authority (CMA) said on Tuesday that ICE should consider reversing its takeover of commodities trading software house Trayport as a merger could substantially reduce competition in European energy trading markets.
Atlanta-based ICE beat arch-rival CME Group (O:CME) to buy London-based Trayport last December but the CMA launched an in-depth investigation in May due to its concerns about the impact on competition.
ICE, in a statement on Thursday, said that CMA's findings were provisional and the watchdog is not expected to make a final decision on the takeover until mid-October. It said it would address the watchdog's concerns and demonstrate that they do not reflect how Trayport will operate as a subsidiary of ICE.
"We do not believe that divestment is necessary, appropriate or in the best interests of Trayport’s customers," ICE said.
The CMA in its report said it was concerned that ICE could use its ownership of Trayport's platform to reduce competition between ICE and its rivals and that reduced competition could lead to increased fees for execution and clearing.
ICE said Trayport would operate as a separate independent business after the takeover.
"Trayport will continue to operate as it does today in European utilities markets and will ensure that brokers, exchanges and clearing houses are all treated fairly and reasonably and are not discriminated against, including with respect to pricing, access and support," the exchange said in its statement.
