S&P in talks to acquire IHS Markit for Us$44bil

Deal will merge two of biggest data providers for Wall Street

NEW YORK: S&P Global Inc is said to be in advanced talks to buy IHS Markit Ltd for about Us$44bil, combining two of the biggest data providers for Wall Street in what would be the year’s second largest deal.

IHS Markit, which provides data, analytics and research, was valued at Us$36.9bil as of the close on Friday, after climbing to a record earlier in the week. The stock has risen 23% this year, compared with S&P Global’s 25% gain, giving it a market capitalisation of Us$82.2bil.

The tie-up will draw comparisons to the London Stock Exchange Group Plc’s (LSE) Us$27bil agreement last year to acquire financial data provider Refinitiv.

Shifts in how traders and investors process information have created opportunities for huge firms to seize on, if they can convince authorities to allow it. The LSE is still negotiating with European Union regulators over the deal.

IHS Markit was itself created out of data provider M&A. IHS’S Us$9.8bil acquisition of Markit in 2016 combined IHS’S information services with Markit’s indexes for financial products such as credit default swaps, just as electronic trading was feeding intense demand for sets of information.

A deal between S&P and IHS Markit would be second only to the Us$56bil set of transactions among China’s biggest oil and gas companies to sell their pipeline networks to a new national carrier, which were finalised in July.

News of the potential deal was first reported by the Wall Street Journal. Bloomberg LP, the parent of Bloomberg News, competes with IHS Markit and S&P Global in providing financial analytics and information.

“That merger would be a shock, no doubt,” said Craig A. Huber, founder of Huber Research Partners LLC. Huber said competition issues could be a factor, given the potential overlap between the firms’ oil and financial data. “There could be some intense regulatory scrutiny,” Huber said.

“I’m not sure if antitrust could be an issue since both are market data providers, so that could be a little tricky,” said Jin Rui Oh, director at United First Partners, an investment and advisory group that specialises in special situations.

The deal would be all stock, the WSJ reported citing unidentified people.

That’s not surprising, Oh said. He cited trends in other large transactions this year, as well as the similarities between the two companies in metrics such as price to earnings.

“That merger would be a shock, no doubt. There could be some intense regulatory scrutiny.” Craig A Huber