After a flurry of rumours the London Stock Exchange Group (LSEG) has confirmed that it is in talks to acquire Refinitiv, a leading global provider of financial data and infrastructure.
According to LSEG, under the key headline terms it is expected that LSEG would acquire Refinitiv for approximately US$27 billion, with new LSEG shares to be issued as consideration in full for Refinitiv’s equity value, after adjusting for Refinitiv’s net debt and other adjustments. The parties anticipate that the transaction would result in the Refinitiv Shareholders holding an approximately 37% stake in the enlarged group and less than 30% of the total voting rights of LSEG.
Refinitiv was founded in 2018 when Thomson Reuters sold a 55% stake in its Financial & Risk (F&R) unit to US private equity firm Blackstone Group LP. Thomson Reuters retains a 45% stake. The company has an annual turnover of US$6bn with more than 40,000 client companies in 190 countries.
As owners of FX trading platform, FXAll and majority owner of the Tradeweb trading platform, Refinitiv also provides access to leading sources of liquidity in FX and fixed income trading. David Cumming, CIO for Equities and Head of UK Equities at Aviva Investors commented on BBC Radio 4’s Today Programme that the deal was “logical, but with some degree of risk attached” and would increase their exposure in the US and allow LSEG “to diversify into FX and fixed income”. He did however add a note of caution in saying that LSEG was “betting the farm” on this deal.
The majority of commentators seem to think this is a “win-win” situation, but some warned of regulatory hurdles ahead and not to discount the potential disruption of a hostile bid for LSEG by the likes of Intercontinental Exchange (ICE).
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