London Stock Exchange (LSE) said it has agreed to buy financial information business Refinitiv in a US$27 billion deal, confirming a move to transform itself into a market data and analytics giant.
“This transaction is a defining moment for LSE in terms of its strategic importance,” LSE chairman Don Robert said in a statement on Thursday, Reuters reports.
As part of the deal, which was initially announced last week, Refinitiv shareholders will ultimately hold around a 37 percent stake in LSE but less than 30 percent of the total voting rights.
Confirmation of the agreement on a deal came as LSE reported an 8 percent rise in first-half total income to 1.1 billion pounds.
The deal comes ten months after a Blackstone-led consortium completed a leveraged buyout of Refinitiv from Thomson Reuters.
LSE said Robert will continue to chair the enlarged company and LSE chief executive David Schwimmer will remain in post, while Refinitiv chief executive David Craig will join LSE’s executive committee and continue to run that business.
The acquisition will help LSE expand its trading business beyond shares and derivatives into currencies by taking on Refinitiv’s FXALL and matching platforms.
It will turn the exchange into a major distributor as well as creator of financial market data, positioning it as a competitor to Bloomberg.
“Increasingly our customers want to trade across different regions and currencies,” Schwimmer said on a call with journalists on Thursday.
But the deal is set to be subject to lengthy antitrust reviews in both Europe and the United States, sources told Reuters before the deal was announced.
In 2017 EU competition regulators blocked LSE’s attempt to merge with rival Deutsche Boerse, the exchanges’ fifth attempt to combine.
LSE executives said they are confident this deal would make it past the regulators.
“We have two very complementary businesses, they are more complementary than they are overlapping,” Schwimmer said.
LSE stressed in its statement that it will retain its commitment to “open access”, an attempt to quash concerns that access to its data could be limited after the Refinitiv deal.
Blackstone’s consortium, which includes Canada Pension Plan Investment Board and Singaporean sovereign wealth fund GIC Special Investments Pte Ltd, holds a 55 percent stake in Refinitiv.
Thomson Reuters, which owns 45 percent of Refinitiv and is the parent company of Reuters, will hold 15 percent of LSE, the Canadian company said in a separate statement.
The company added that the agreement signed at the time Refinitiv was sold to the Blackstone-consortium for Reuters to supply news to Refinitiv for 30 years will remain in place.
LSE said it will ask shareholders to vote on the deal in the fourth quarter of 2019.
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