Five major outcomes of the London Stock Exchange acquisition of Refinitiv
Today it was announced that the London Stock Exchange Group (LSEG) will acquire the financial information provider, Refinitiv, in a US$27bn deal.
FinTech shares five facts about the acquisition:
1. Great news Refinitiv shareholders: Major Refinitiv Shareholders such as Blackstone and Thomson Reuters will enjoy approximately 37% economic interest in LSEG, and around 30% of the total voting rights of LSEG.
Additionally, on Thursday afternoon shares in LSEG increased by just shy of 9%.
2. LSEG to face increase of net debt: LSEG has a minimal $1.2bn of debt, but the acquisition of Revinitiv will considerably increase the companies debt to just under $5bn.
3. Increase in international value: According to the LSEG, one of the major benefits to emerge from the transaction is the creation of a "global multi-asset capital markets business."
Schwimmer emphasised that this was not a result of a no-deal Brexit: “LSEG has been prepared for whatever may come through Brexit,” he said. “We are already diversified across regions and by currencies. This transaction helps us become more global. This is not about Brexit.”
4. A return to the public market: Refinitiv was privatised by Reuters in 2018. The acquisition of the company marks a return to the public market.
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5. The rise of a financial empire: The expansion of the LSEG following after the acquisition will situate the financial institution to rival that of America's Bloomberg LP. Chief Executive of LSEG, Schwimmer remarked: It is a rare and compelling opportunity to combine two world-class businesses and create a global financial infrastructure leader. We will continue to be a global business headquartered in the UK.
As the LSEG increases considerably in size, chairman Don Robert and David Schwimmer will remain in their roles, while Refinitiv Chief Executive David Craig will join the LSEG executive committee.
LSEG expects to complete the transaction by late 2020.
Refinitiv features in our August edition of FinTech