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Data giant S&P Global has agreed to acquire IHS Markit for US$44 billion, which will become the largest merger in 2020 and occupy a place in the increasingly competitive financial information market.
This huge transaction includes $4.8 billion in debt, which marks the acceleration of transaction activity as the breakthrough in the development of the Covid-1
According to data from Refinitiv, transactions hit a record high in the September quarter, with a transaction volume exceeding $1 trillion, mainly in areas with anti-coronavirus capabilities, such as technology and healthcare.
The two companies said in a statement that under the terms of the transaction, each share of IHS Markit will be exchanged for a fixed proportion of 0.2838 shares of S&P Global stock.
After the transaction is completed, Standard & Poor’s global shareholders will own approximately 67.75% of the combined company on a fully diluted basis, while IHS shareholders will own approximately 32.25% of the shares.
S&P Global is known for providing debt ratings to countries and companies as well as global capital and commodity market data. In 2011, the then parent company McGraw-Hill separated Standard & Poor’s (S&P) from the education business and became an independent company.
IHS Markit was founded in 2016 when IHS acquired Markit for approximately US$6 billion. Its business ranged from data on the automotive and technology industries to the publication of Jane’s Defense Weekly.
Markit was founded by former credit trader Lance Uggla to provide a series of pricing and reference data for financial assets and derivatives.
According to Reuters calculations, based on the stock’s closing price on Friday, IHS’s market value is approximately US$36.88 billion. So far this year, its share price has risen by approximately 22%.
As the financial information market becomes more concentrated, the transaction may be subject to close scrutiny by competition regulators.
The Wall Street Journal reported on the deal earlier on Monday.
The London Stock Exchange is in the final stages of seeking to pass the planned US$27 billion acquisition of data provider Refinitiv, which has passed a lengthy review by the EU Competition Commissioner.
Refinitiv was removed by Thomson Reuters in 2018 when private equity giant Blackstone bought a 55% stake in the business, the biggest bet since the 2008 financial crisis. Thomson Reuters, the parent company of Reuters News, retains 45% of the business.