Refinitiv and LSE agree $27bn deal

November 2019 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

November 2019 Issue

In a move designed to create a financial markets infrastructure leader of the future, London Stock Exchange Group plc (LSEG) has agreed definitive terms with a consortium to acquire Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, in an all-share transaction valued at approximately $27bn.

The consortium includes certain investment funds affiliated with Blackstone and Thomson Reuters, affiliates of Canada Pension Plan Investment Board (CPPIB) and GIC, as well as additional co-investors.

Once complete, the acquisition will create a leading, UK-headquartered, global FMI provider with a leading data and analytics business, significant capital market capabilities across multiple asset classes and a broad post-trade offering. In addition, the transaction will result in Refinitiv shareholders holding an approximate 37 percent economic interest in LSEG and less than 30 percent of the total voting rights of LSEG.

“LSEG’s business is highly complementary with Refinitiv’s leading global data platform, transaction and distribution network,” said David Craig, chief executive of Refinitiv. “Our aim is to capture the opportunity of data which we believe is driving unprecedented change in the global financial community. The combined business will allow us to better serve customers across all regions. Our two companies both have strong heritages, a shared approach to open access and partnership.”

Mr Craig will continue in his role following completion of the transaction and will also join LSEG’s executive committee. The combined business will be chaired by LSEG’s chairman Don Robert and be led by David Schwimmer, LSEG’s chief executive. David Warren will be LSEG’s chief financial officer.

Serving over 40,000 institutions in over 190 countries, Refinitiv provides leading data and insights, trading platforms, and open data and technology platforms that connect global financial markets – driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime.

“Refinitiv has been an outstanding performer for Blackstone and our partners Thomson Reuters, CPPIB and GIC,” said Martin Brand, senior managing director at Blackstone. “We believe the combination announced today creates a strongly positioned leader in financial markets infrastructure, and we are excited about the continued prospects of Blackstone’s investment as a long-term partner of LSEG.”

Indeed, in 2018, LSEG and Refinitiv generated combined annual revenue of over £6bn, which would have made the combined business the largest listed global FMI provider by revenue.

“With the acquisition of Refinitiv, we will transform our position as a leading global financial markets infrastructure group,” said Mr Schwimmer. “Refinitiv brings highly complementary capabilities in data and capital markets, as well as deep customer relationships across a truly global business. We share a commitment to open access and to partnering with our customers to deliver innovative solutions across the financial markets value chain.

“Our shareholders and customers will benefit from attractive top line growth prospects, substantial cost and revenue synergies, as well as ongoing efficiency initiatives,” he continued. “This transaction will ensure we are well-positioned for future growth in an evolving landscape.”

Completion of the transaction is expected during the second half of 2020, subject to relevant competition and financial regulatory approvals, including in the EU and the US, as well as the approval of LSEG shareholders.

Mr Craig concluded: “We are excited to work with the LSEG team to create a leading financial markets infrastructure group and to continue to invest in our business.”

Fraser Tenannt