CNET también está disponible en español.

Ir a español

Don't show this again

HolidayBuyer's Guide
Tech Industry

Net chemicals-exchange mixes with rival

ChemConnect agrees to buy CheMatch in hopes of increasing its size of the market in an industry that has been steadily shrinking during the last year.

ChemConnect, an Internet chemicals exchange, said Thursday that it agreed to buy one of its competitors in a bid to increase its size of the market and turn a profit by the end of the year.

Together, ChemConnect and rival CheMatch facilitate $4 billion a year in transactions between buyers and sellers of bulk chemicals like benzine and methanol through online auctions and electronic commodity trading floors. ChemConnect collects a fee for each trade as well as subscription fees from more than 7,500 member companies.

ChemConnect said that it will have to nearly double that $4 billion figure if it hopes to turn a cash profit, but that the CheMatch deal would make that possible.

The selection of online trading exchanges for chemicals has been steadily shrinking during the last year as rivals swallow one another or go out of business. EnronOnline, which ceased operations before parent company Enron filed for bankruptcy, was one of the largest chemicals exchanges.

But Michele Hincks, a ChemConnect executive, said the deal would increase the likelihood that people would trade online because the "confusion" about whom to do business with has been cleared up.

The acquisition was a stock deal, but specific financial terms were not disclosed.

ChemConnect, which acquired competitor Envera last June, will relocate its headquarters from San Francisco to Houston as part of the deal, which should be final by March following shareholder and regulatory approval.