Daily Management Review

LSE sets to buy Refinitiv


The London Stock Exchange (LSE) is negotiating purchase of the financial information-analytical company Refinitiv. The transaction may reach $ 27 billion, and create the world's largest publicly traded capital analysis company.

jam_90s via flickr
jam_90s via flickr
LSE's statement on negotiations on the purchase of Refinitiv was a reaction to media reports on Saturday. According to the LSE Group, which manages the exchange, negotiations are held with the largest shareholders of Refinitiv, a consortium of investors led by the American private investment fund Blackstone, which owns 55%, and Thomson Reuters, which owns the remaining 45%.

Refinitiv is the former financial and analytical division of Thomson Reuters - Thomson Reuters Financial & Risk. The latter collects and analyzes information on activity in the global financial market: dynamics and volumes of mergers and acquisitions (M&A), primary (IPO) and secondary (SPO) publick offerings , dynamics of bond markets, proceeds of financial intermediaries (investment banks, etc.) for carrying out M&A transactions and placement of shares and bonds. In October last year, Thomson Reuters sold a majority stake of 55% to a consortium of investors led by Blackstone, and the division itself was renamed as Refinitiv. The annual turnover of Refinitiv is about $ 6 billion; the company has about 40 thousand clients among financial, media and other companies in 190 countries of the world.

LSE Group notes that Refinitiv can be bought for $ 27 billion.

The transaction will be completed through exchange of shares of the LSE Group and Refinitiv; shareholders of the latter will receive 37% and almost 30% of voting rights in the LSE Group.

Analysts explain the desire to purchase Refinitiv by the fact that stock exchanges have long been trying to consolidate or expand sources of revenue. This is especially true for European exchanges that are experiencing increasing competition from Asian and American sites. In 2016, LSE attempted to merge with Frankfurt's Deutsche Boerse, which could lead to the creation of the largest stock exchange in Europe and the third largest in the world after the American NYSE and NASDAQ. However, the EU authorities have blocked the merger, considering that it will result in creation of a monopoly and prevent competition in Europe. Now the London Stock Exchange decided to go the other way. “Information and data are the circulatory system of modern financial markets more than ever,” Reuters quotes Kevin McPartland from consulting and analyst firm Greenwich Associates. “Such information and such data are becoming increasingly more valuable.”

source: reuters.com