The London Stock Exchange Group (LSEG) has confirmed it is taking part in advanced talks to acquire financial data and trading platform provider Refinitiv.
The acquisition is estimated to be worth $27 billion and would add fuel to the bourse’s fastest-growing business.
Refinitiv shareholders, Thomson Reuters and Blackstone, are expected to hold a 37% stake in the enlarged group and less than 30% of the total voting rights of LSEG.
In a statement explaining the logic behind the deal, LSEG says: “The Board has conviction that a leading financial markets infrastructure provider must operate globally and across asset classes, with data management, analytics and distribution capabilities that can serve customers across asset classes and geographies.”
The rumours of an acquisition has been met with general approval from the wider market, as shares in the London exchange venue leaping by 14%.
It marks the first major strategic decision made by LSE chief executive officer David Schwimmer, who has seen stock prices jump by 40% in the last year.
The company has seen significant growth in recent years from its information services unit, adding Refinitiv to its portfolio may strengthen that push.
As it stands, Refinitiv currently serves over 40,000 customer institutions across 190 countries including buy and sell-side firms, market infrastructure companies, governments, financial technology firms and corporations.
If the deal is agreed, it would put the duo on the same level as Bloomberg. Together LSEG and Refinitiv would be the largest listed global financial markets infrastructure provider by revenue – with combined annual revenues of over £6 billion in 2018.
“The LSE is clearly pursuing deals that are more vertical than horizontal, presumably after seeing competition difficulties issues arise when some deals with other exchanges are mooted,” explained Niki Beattie, founder of consultancy Market Structure Partners in London.