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An image of the London skyline, taken during the evening.
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Data giant S&P Global has agreed to buy IHS Markit in a $ 44 billion deal that will be the biggest merger of 2020, creating a heavyweight in the increasingly competitive market financial information.
The mega-deal, which includes $ 4.8 billion in debt, is a sign that negotiating activity is picking up steam as breakthroughs in Covid-19 vaccine development improve the economic outlook.
Transactions hit an all-time high in the September quarter, with more than $ 1 trillion in transactions, mostly focused on coronavirus-resilient sectors such as technology and healthcare, according to data from Refinitiv.
Under the terms of the deal, each IHS Markit share will be exchanged for a fixed ratio of 0.2838 S&P Global shares, the two companies said in a statement.
Upon completion of the transaction, S&P Global shareholders will own approximately 67.75% of the combined company on a fully diluted basis, while IHS shareholders will own approximately 32.25%.
S&P Global is renowned for providing debt ratings to countries and corporations, as well as data on capital and commodity markets around the world. It became a stand-alone business in 2011 when its then parent company, McGraw-Hill, separated S&P from its education business.
IHS Markit was formed in 2016 when IHS, whose business ranges from data on the automotive and tech industries to publishing Jane’s Defense Weekly, bought Markit for around $ 6 billion.
Markit, founded by former credit trader Lance Uggla, provides a range of price and benchmark data for financial assets and derivatives.
IHS has a market value of around $ 36.88 billion based on the stock’s last close on Friday, according to a Reuters calculation, with its share price rising around 22% so far this year.
The transaction will likely be the subject of close scrutiny by competition oversight bodies as the financial reporting market becomes increasingly concentrated.
The Wall Street Journal broke news of the deal earlier on Monday.
The London Stock Exchange is in the final stages of trying to secure approval for its planned $ 27 billion acquisition of data provider Refinitiv, which has been the subject of a lengthy review process by the Commissioner of competition from the European Union.
Refinitiv was pulled from Thomson Reuters by private equity giant Blackstone in 2018, when it bought a 55% stake in the company in its biggest bet since the 2008 financial crisis. Thomson Reuters, parent company of Reuters News, retains a 45% stake in the company.
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