NYSE, APX JV Forms NYSE Blue - Analyst Blog

In an attempt to enhance its global environmental energy business, NYSE Euronext Inc.’s (NYX) Paris-based carbon credits spot market BlueNext entered into a joint venture (JV) with a U.S.-based private entity, APX Inc. to build NYSE Blue. The deal is anticipated to culminate by the end of 2010, subject to regulatory and shareholders’ approval.

APX provides infrastructure for environmental commodities and energy markets. It has a strong presence in the U.S. renewable energy certificate market and the global voluntary carbon market. Hence, it blends well with the operations of NYSE’s BlueNext in Europe.

There is an increasing need for innovative tools and trading instruments to deal with new types of business risks including those around energy, carbon, renewable energy, water and other environmental factors. Given the recent developments in the environmental space, there appears to be significant scope for growth in energy and environmental markets, particularly that of North America and Asia. As such, the NYSE Blue JV will primarily focus on environmental and sustainable energy markets.

Thus, NYSE Blue JV will offer a huge variety of services and solutions such as integrated pre-trade and post-trade platforms including the BlueNext trading platform along with a front-end market access and environmental portfolio management. Besides, the NYSE Blue JV will also provide services that include environmental registry and environmental markets reference data.

This is expected to boost NYSE’s competitive leverage in the energy and environmental markets. Moreover, a successful blending of an environmental commodities infrastructure provider like APX with a global exchange like NYSE is expected to offer a unique entry point into these rapidly developing markets.

NYSE will be the major stakeholder in NYSE Blue with about 60% of ownership, whereas, APX will provide its business in return for a minority share. The shareholders of APX that include Goldman Sachs Group Inc. (GS), MissionPoint Capital Partners and Onset Ventures will be among the minority stakeholders in the JV.

While NYSE’s European carbon trading unit (BlueNext) and APX aim to optimally utilize its resources in order to create valuable synergies in the energy and environmental market, the JV also projects to expand globally with a primary focus on North America and Asia. Through this JV, NYSE attempts to make an effort to augment its presence in environmental markets globally while drawing new partners and customers into the venture.
 
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