The culture of growing through acquisitions is growing tremendously. The companies have started exploring the acquisition as a means to grow their efficiency and effectiveness. Another example in this row is going to set by London Stock Exchange as it confirms to acquire Refinitiv for $27 billion, including debt, in a seismic deal that would create a U.K. data and trading giant.
The London Stock Exchange, which has a market capitalization value of £19.7 billion, said that it has been in discussions with the owners of Refinitiv to buy the data company. A consortium led by the private-equity giant the Blackstone Group (BX) owns 55% of Refinitiv, with Thomson Reuters (TRI) holding the rest.
The collaboration between the two companies would create the largest listed global financial markets infrastructure provider by revenue. A City M&A banker called it a “blockbuster” deal. The talks come at a critical time for London with the capital’s role as a global financial center having come under question as the U.K. prepares to backout from the European union. The London exchange said the combined company would have its headquarters in the U.K.
Together, the companies would have generated revenues of more than £6 billion last year. The LSE says it believes it could achieve annual cost-savings in excess of £350 million in the five years after completing a deal. The stock exchange, however, cautioned that there was no certainty of a deal.
The stock exchange said: “The digital transformation of the financial markets infrastructure landscape, together with the increased potential for innovation, is driving customer demand for sophisticated data content and analytics provided on flexible and open platforms. Against this backdrop, the board has conviction that a leading financial markets infrastructure provider must operate globally and across asset classes.”
Refinitiv shareholders would own 37% of the combined group but less than 30% of the voting rights. The LSE said it would issue new shares to pay for the equity component of its target acquisition.