London Stock Exchange unveiled Thursday a $27 billion takeover of US financial data provider Refinitiv that marks a major strategy shift to providing investors with a wider range of services.
In a statement the LSE said it had "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." The deal will help shift LSE from generating revenue solely from the trading of securities to providing investors information about trading, which will put it in direct competition with data and financial news firm Bloomberg.
Refinitiv, which serves in excess of 40,000 institutions in more than 190 countries, was formerly the financial and risk business of Thomson Reuters. Private equity firm Blackstone subsequently became its majority shareholder alongside Thomson Reuters. "The transaction brings together two highly complementary businesses ... to create a leading, UK headquartered, global financial markets infrastructure ... 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 LSE said.
The transaction will result in Refinitiv shareholders ultimately holding approximately 37 percent in LSE, but less than 30 percent of the total voting rights, according to the statement.
The Refinitiv takeover marks a change of LSE strategy and comes two years after its failed £21-billion merger with Germany's Deutsche Boerse. That gigantic deal - the third failed attempt at a tie-up between the British and German stock exchange operators - was blocked by the European Commission on fears it would undercut competition.