LONDON: London Stock Exchange Group plc (LSEG) has agreed definitive terms with a consortium including certain investment funds affiliated with Blackstone as well as Thomson Reuters to acquire the Refinitiv business in an all share transaction for a total enterprise value of approximately US$27 billion.

Blackstone’s consortium includes an affiliate of Canada Pension Plan Investment Board (CPPIB), an affiliate of GIC and certain co-investors. The transaction will result in the Refinitiv shareholders ultimately holding an approximate 37 percent economic interest in LSEG and less than 30 percent of the total voting rights of LSEG.

The transaction brings together two highly complementary businesses to create a leading, UK headquartered, global financial markets infrastructure (FMI) provider with a leading data and analytics business, significant capital markets capabilities across multiple asset classes, and a broad post-trade offering, well positioned for future growth in a fast evolving landscape.

The Transaction will enhance LSEG’s existing customer offering by bringing together:

• LSEG’s diversified global business focused on: Information Services through its financial indexing, benchmarking and analytical services, FTSE Russell; Post-Trade services through its leading global multi-asset CCPs, LCH and CC&G, and custody and settlement business; and Capital Markets through its broad range of international equity, fixed income and derivatives markets; and
• Refinitiv’s market data, analytics and execution capabilities are across asset classes and focus on four core customer segments; trading, investment and advisory, wealth, and risk management. In Data and Analytics, where Refinitiv is a leading provider of company, economic, deal, pricing and reference data, low latency real-time data and desktop analytics; in Venues, including the FXall and Matching Foreign Exchange (FX) trading platforms and the Tradeweb fixed income trading platform (in which Refinitiv owns a majority interest); and in Risk, where a range of products supports compliance and regulatory needs for a broad number of financial and corporate clients.

The combined business will be well positioned in all key geographies and will offer significant customer benefits across the full range of LSEG’s businesses by: extending its trading capabilities across asset classes; expanding its data content, management and distribution capabilities; increasing its global footprint and range of customer offerings; and enabling LSEG, Refinitiv and their customers to benefit from future data and technology-enabled innovation and growth opportunities.

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

Commenting on the Transaction, Don Robert, Chairman, LSEG, said: “This transaction is a defining moment for LSEG in terms of its strategic importance. It will create substantial value for our shareholders and important benefits for our customers, employees and other stakeholders. The Board and I look forward to welcoming Blackstone and Thomson Reuters as supportive, long-term shareholders as we work together to realise the compelling benefits of this transaction.”

Commenting on the Transaction, David Schwimmer, CEO, LSEG, said: “With the acquisition of Refinitiv, we will transform our position as a leading global Financial Markets Infrastructure group. 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, and this transaction will ensure we are well positioned for future growth in an evolving landscape.”

Commenting on the Transaction, Martin Brand, Senior Managing Director at Blackstone, said: “Refinitiv has been an outstanding performer for Blackstone and our partners Thomson Reuters, CPPIB, and GIC. 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.”

Commenting on the Transaction, David Craig, CEO, Refinitiv, said: “LSEG’s business is highly complementary with Refinitiv’s leading global data platform, transaction and distribution network. 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, and 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.”

Edited by Kiran Khan