The London Stock Exchange Group has agreed a $27bn (£22bn) deal to buy Refinitiv in a move that will transform it into a UK-headquartered, global rival to Michael Bloomberg’s financial news and data business.
The all-share deal will allow LSE to take control of Refinitiv, whose Eikon terminals on trading floors challenge those provided by Bloomberg, from a consortium led by Blackstone and including Thomson Reuters, which owns the Reuters news service.
LSEG’s shares rose 5% to £69.50 on the news of the finalisation of the deal, giving the business a stockmarket value of £24bn. LSEG’s share price has risen by more than 60% over the last year.
“The acquisition of Refinitiv is transformational,” said David Schwimmer, the chief executive of LSEG. “It is a rare and compelling opportunity to combine two world class businesses and create a global financial infrastructure leader. We will continue to be a global business headquartered in the UK.”
Schwimmer said the deal would increase its presence in the US, the world’s biggest financial market, and also allow it to expand in Asia and emerging markets.
He said that increasing LSEG’s international exposure is not a response to Brexit and that the company is prepared for a no-deal scenario.
“LSEG has been prepared for whatever may come through Brexit,” he said. “We are already diversified across regions and by currencies. This transaction helps us become more global. This is not about Brexit.”
The finance chief, David Warren, said there would be job cuts, as part of £350m of cost savings over the next five years, but would not say how many redundancies there would be.
“I can’t quantify them, it would be too early to do that,” he said. “[There will be] employee related efficiencies.”
He said there is a lot of overlap in areas including technology, property, and corporate functions. “Those are the main areas of opportunity [for cost savings],” he said.
LSEG employs about 5,000 staff while Refinitiv has 19,000 employees. Separately, in March, LSEG said it was cutting about 250 staff, 5% of its global workforce, to save £30m.
Under the deal Refinitiv shareholders will own 37% of the combined group, with Thomson Reuters holding a 15% stake.
Blackstone moved to take a majority stake in Thomson Reuters’ financial and risk business just last year, subsequently renaming it Refinitiv, for $20bn.
LSEG’s move is the latest in a City spree that has recorded £35bn in deals in the last week.
Earlier this week, Just Eat, the food delivery app, and Dutch rival Takeaway.com announced plans for a £9bn merger that would create one of the world’s biggest online food delivery companies.
Last week, Cobham, the UK aerospace and defence supplier founded by a British aviation pioneer, agreed to be bought by US private equity firm Advent International in a £4bn deal.
