NZX extends expansion into agriculture

Tuesday 6th October 2009

NZX, operator of the New Zealand stock exchange, is acquiring Australia’s Clear Group, owner of the Clear Grain Exchange, as it extends its foray into agricultural trading, data and media.

The initial purchase price of A$6.4 million may increase if the grain trading platform meets certain performance targets, NZX said in a statement. The purchase includes Clear Interactive, which uses the same development languages as NZX’s Energy Markets business and adds experience in development of online trading platforms.

More than 1,100 grain growers, 100 brokers and 200 buyers and bulk handlers across Australia are registered with Grain Exchange, which is soon to link with a further 13,000 growers registered with GrainCorp, the country’s largest bulk handlers of grain.

Grain trading will add to a suite of agricultural products NZX plans to roll out including milk powder futures as it seeks to diversify away from stock trading, where volumes have dwindled this year.

“This transaction brings together two key components of NZX’s strategy; trading of agricultural commodities and acquiring technology development expertise to grow markets,” said chief executive Mark Weldon.

“This deal combines Clear’s technology development expertise and grain market knowledge with NZX’s expertise in developing markets and distributing market data and information.

Shares of NZX were unchanged at $8 and have climbed 66% so far this year, making its the second-biggest gainer on its own board.

Grain Exchange is Australia’s only full-service grain trading electronic market linking grower, brokers and marketers, according to the statement. It was established last November following the deregulation of the Australian Wheat Board to allow spot commodities trading, back office, settlement and payment services.

NZX’s stable of agricultural and market information assets includes ProFarmer, an Australian grain market data business, NZX Agrifax, Dairy Week and eight agri-media publications including Farmer’s Weekly.

“Grain Exchange is proven and has strong growth potential in grain and other agricultural commodities,” said Weldon. “This is the best platform we have seen. The opportunity to acquire a full platform with connected customers and proven speed to market makes extremely sound business sense.”

Businesswire.co.nz

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