(Bloomberg) — S&P Global Inc. has agreed to buy IHS Markit Ltd. for about $39 billion in stock, a deal that accelerates the wave of consolidation among the finance industry’s biggest data providers. S&P is offering 0.2838 share for each IHS Markit share, representing a premium of about a 4.7% to IHS Markit’s last close, according to a statement Monday. After the deal, S&P shareholders will own approximately 68% of the combined company, which will be led by S&P’s Chief Executive Officer Douglas Peterson.
The deal marries S&P, one of the most famous names in financial markets, with a research company that supplies forecasts to most of the world’s biggest companies as well as pricing for bonds and credit default swaps. The combination creates a challenger to the London Stock Exchange Group Plc, which last year agreed to acquire Refinitiv for $27 billion, as financial firms are locked in a race for scale to meet surging demand for data and analytics in increasingly computerized financial markets.
S&P shares rose 2.7% at 10:44 a.m. in New York trading. IHS shares were up more than 8%. S&P is paying a hefty premium for the IHS business: The deal’s value translates to about 10 times revenue, more than double the comparable valuation that LSE paid for the Refinitiv business. “This is a huge consolidation of financial databases and services,” said Gary Dugan, chief executive officer of the Global CIO Office, an investment firm in Singapore. “S&P probably gathered that expansion incrementally wouldn’t work and instead has gone for a major acquisition, which will deepen their product range and relevance.”
