S&P Global Acquires IHS Markit in Mega Financial Data Deal

Merger Could Be Biggest of 2020

In what’s being called the biggest corporate acquisition of the year, S&P Global (SPGI) plans to buy IHS Markit (INFO) in an all-stock deal worth $44 billion. The deal exemplifies how important big data has become in the financial trading industry.

S&P Global assigns debt ratings and provides worldwide market data, while IHS Markit collects pricing and reference data. The merger will create another financial information giant that could compete with other providers like Bloomberg and Refinitiv. According to executives, the companies have been negotiating the merger for the last few months. The next step is for the antitrust regulatory approval process to begin.

What the Deal Means for Investors

IHS Markit is valued at roughly $36.88 billion, and its shares have climbed by about 32% this year. When the merger is completed, S&P Global shareholders will own about 67.75% of the new combined company and IHS shareholders will own the remainder.

The deal must receive a green light from antitrust regulators before it can become a reality. Analysts expect watchdogs to closely examine how the IHS and S&P Global partnership will impact the financial data provider landscape which is quickly consolidating.

Acquisition Piggybacks On M&A Wave

The London Stock Exchange (LSE) is currently working on passing an antitrust examination before acquiring data giant Refinitiv for $27 billion. That review process has been drawn out, and the S&P Global and IHS merger is expected to be lengthy as well. Executives say the approval process could take six to nine months and wrap up in late 2021.

The S&P Global and IHS takeover follows a wave of merger and acquisition activity that reached a record high in the third quarter. According to Refinitiv data, over the three months ending in September there were more than $1 trillion worth of transactions. Most of these were focused in the technology and healthcare sectors, which have weathered the pandemic relatively better than some other stock groups.

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