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LSE shoots for global finance data league with Refinitiv takeover

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London (AFP)

London Stock Exchange unveiled Thursday a $27 billion takeover of US financial data provider Refinitiv that would create a market information giant to rival Bloomberg.

In a statement, LSE said it had agreed "definitive terms" with shareholders for "an all share transaction for a total enterprise value of approximately $27 billion".

Shares in the LSE soared after the announcement of the deal, which is scheduled to be completed next year.

Refinitiv's shareholder consortium, made up of funds affiliated with private equity firm Blackstone and Canadian media group Thomson Reuters, will own around 37 percent of LSE but less than 30 percent of voting rights.

The deal will help shift LSE from generating revenue solely from the trading of securities to providing investors information about trading, which will put it in direct competition with data and financial news firm Bloomberg.

Refinitiv, which serves in excess of 40,000 institutions in more than 190 countries, was formerly the financial and risk business of Thomson Reuters.

Private equity firm Blackstone subsequently became its majority shareholder alongside Thomson Reuters.

"The transaction brings together two highly complementary businesses... to create a leading, UK headquartered, global financial markets infrastructure (FMI)... provider," the LSE said.

The company will be "a leading 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," it added.

- 'Unprecedented change' -

The Refinitiv takeover marks a change of LSE strategy and comes two years after its failed £21-billion ($25.5 billion, 23 billion euro) merger with Germany's Deutsche Boerse.

That gigantic deal -- the third failed attempt at a tie-up between the British and German stock exchange operators -- was blocked by the European Commission on fears it would undercut competition.

American David Schwimmer then took the top job at the LSE, after a 20-year career with US banking behemoth Goldman Sachs.

The combined business will be chaired by LSE chairman Don Robert, with Schwimmer as chief executive and David Warren as chief financial officer.

David Craig will continue as Refinitiv chief executive and join LSE's executive committee.

"LSE's business is highly complementary with Refinitiv's leading global data platform, transaction and distribution network," said Craig.

"Our aim is to capture the opportunity of data which we believe is driving unprecedented change in the global financial community.

"The combined business will allow us to better serve customers across all regions."

LSE and Refinitiv generated combined annual revenue of more than £6 billion in 2018, which would have made the combined business the largest listed global financial markets infrastructure provider by revenue last year.

Schwimmer said: "With the acquisition of Refinitiv, we will transform our position as a leading global FMI group.

"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."

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