The London Stock Exchange Group (LSEG) has agreed definitive terms to acquire Refinitiv from a consortium led by Blackstone and Thomson Reuters, in an all share transaction worth approximately $27 billion.

The transaction will result in the Refinitiv shareholders ultimately holding an approximate 37 per cent economic interest in LSEG and less than 30 per cent of the total voting rights of LSEG.

According to a statement, the deal will create a UK headquartered, global financial markets infrastructure (FMI) provider with a 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 combined business will be well positioned in all key geographies and will extend LSEG’s trading capabilities across asset classes, expanding its data content, management and distribution capabilities, and increasing its global footprint and range of customer offerings. Crucially, Refinitiv's Eikon trading terminals challenge those provided by Bloomberg.

Together, LSEG and Refinitiv generated combined annual revenue of over £6 billion in 2018, which would have made the combined business the largest listed global FMI provider by revenue last year.

The combined business will target delivery of revenue compound annual growth rate of five to seven per cent over the first three years following completion, achieved through the continued performance of LSEG’s current businesses, the completion of the ongoing transformation of Refinitiv, future growth drivers across both businesses and targeted annual run-rate revenue synergy benefits in excess of £225 million by the end of year five.

The combined business will be chaired by LSEG chairman Don Robert and led by David Schwimmer as continuing as chief executive, with David Warren as chief financial officer. David Craig will join LSEG’s executive committee and continue as chief executive of Refinitiv.

Robert stated: “The board and I look forward to welcoming Blackstone and Thomson Reuters as supportive, long-term shareholders as we work together to realise the compelling benefits of this transaction.”

For so long as the Refinitiv shareholders are entitled to nominate three Refinitiv directors, one such nominee will be a representative of Thomson Reuters, while the other two nominees will be representatives of Blackstone.
The approval of LSEG shareholders will be sought at the general meeting, which will be convened before the end of 2019. Completion is expected to occur during the second half of 2020.

Schwimmer added: “Refinitiv brings highly complementary capabilities in data and capital markets, as well as deep customer relationships across a truly global business – our shareholders and customers will benefit from attractive top line growth prospects, substantial cost and revenue synergies, as well as ongoing efficiency initiatives, and this transaction will ensure we are well positioned for future growth in an evolving landscape.”

Craig concluded: “LSEG’s business is highly complementary with Refinitiv’s leading global data platform, transaction and distribution network – our aim is to capture the opportunity of data which we believe is driving unprecedented change in the global financial community.”

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