The largest corporate acquisition of 2020 was marked by the announcement of the acquisition of IHS Markit by the data giant S&P Global in a deal with $44 billion. The completion of the deal will also create one of the leading companies in the financial information market which is growing fast.
The negotiations for the mega deal have been on-going for the last few months, IHS Markit Chief Executive Officer Lance Uggla told employees in a memo, according to reports. This deal also underscores the growing importance of the field of big data within financial markets which is powered by trading algorithms that require constant flow of data.
Pending approval by antitrust regulators, who have shown greater interest in the sector, the deal is expected to be closed in the second half of 2021.
“The next steps will be to receive regulatory approvals both in the U.S. and the EU, which we expect to take between six to nine months, and receive approval by our respective shareholders,” Uggla said in the internal memo seen by Reuters.
Providing debt ratings to countries and companies is what S&P Global is best known for, in addition to providing data on capital and commodity markets throughout the world. After its parent McGraw-Hill separated S&P from its education business in 2011, the company became a standalone business.
The purchasing of Markit for around $6 billion by IHS, whose businesses range from data on automotive and technology industries to publishing Jane’s Defence Weekly in 2016 resulted in the creation of IHS Markit.
A range of pricing and reference data for financial assets and derivatives is provided by Markit, founded by former credit trader Uggla,
Based on the stock’s last close on Friday, IHS has a market value of around $36.88 billion, said reports.
The two companies said that each share of IHS Markit will be exchanged for a ratio of 0.2838 shares of S&P Global stock as part of the deal in addition to $4.8 billion of debt.
According to Refinitiv data, in the third quarter, a record high was reached in the global merger and acquisition activity with transactions worth more than $1 trillion and a large number of these deals took place in those sectors that were not hugely affected by the novel coronavirus pandemic including the technology and healthcare sectors.
The London Stock Exchange is in the final stage of trying to win clearance for its planned $27 billion acquisition of data provider Refinitiv, which has been through a long review process by the European Union’s competition commissioner.
In 2018, private equity giant Blackstone created Refinitiv out of Thomson Reuters when the former made a purchase of a 55 per cent stake in the business in its biggest bet since the 2008 financial crisis.
(Adapted from CNBC.com)