Market Overview

$27B Mega Merger Happening Oversees: London Stock Exchange To Buy Refinitiv

$27B Mega Merger Happening Oversees: London Stock Exchange To Buy Refinitiv

The London Stock Exchange reached an agreement to acquire financial markets data gathering company Refinitiv in a $27 billion deal.

What Happened

LSE's acquisition of Refinitiv will transform the England-based stock exchange to a global market data and analytics behemoth. The stock exchange's information-services business grew revenue by 9% to £841 million ($1.04 billion) last year which was more than double the core capital markets business, according to The Wall Street Journal.

The combination of Refinitiv with the LSE's information-services business would create a new entity that generates more than £6 billion a year. The LSE would also generate annual cost savings of more than £350 million in five years after the deal is completed.

Excluding Refinitiv's debt of $12.2 billion as of the end of 2018, the LSE would be paying just shy of $15 billion for the company. The exchange said it partly fund the transaction by offering its own stock.

Why It's Important

LSE's acquisition would give it access to Refinitiv's Tradeweb, FXAll and Matching platforms which contribute in part to the average daily trading volume of more than $400 billion in global currencies and half a trillion dollars in fixed income.

If approved, Refinitiv's investors will own around 37% of the new entity but less than 30% of total voting rights. The LSE will own the remaining 63% which will continue to be based in London.

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