LSE gets green light for £20bn Refinitiv deal

EUROPEAN regulators have finally cleared the blockbuster £20bn takeover of data firm Refinitiv by the London Stock Exchange (LSE).

The European Commission backed the deal yesterday, paving the way for the LSE to form a powerhouse in financial markets. The green light was the last major hurdle in a tieup originally announced in August 2019, which is set to make the advisers and investment bankers who worked on it more than £830m.

However the European regulators said their approval was conditional on the LSE selling Italian exchange, the Borsa Italiana, continuing to distribute certain clearing services free of barriers, and maintaining competitors’ access to LSE data and FTSE indices such as the FTSE 100.

Commission executive vicepresident Margrethe Vestager said: ‘Infrastructure competition in trading services, and access to financial data products on fair and equal terms, is essential for the European economy and in particular for consumers and businesses.’

The deal was approved because ‘the acquisition will not lead to higher prices or less choice and innovation’.

The merger creates a company to rival the likes of Bloomberg, S&P Global and Intercontinental Exchange in everything from data to clearing and trading. The investors selling Refinitiv, led by US private equity giant Blackstone, will get a 37pc stake.

The Commission took more than a year to investigate due to fears that the merger would hand the LSE too dominant a position in some markets.

The LSE’s Borsa Italiana owns bond-trading venue MTS while Refinitiv owns a similar platform called Tradeweb. To prove it was not trying to gain a monopoly, the LSE last year agreed to sell Borsa Italiana.

The regulator was also concerned that the combined company would have too much power in the clearing – moving money from the buyer to the seller – of complex interest rate derivatives, which are used by investors and firms to hedge interest rate risks.

But the LSE has now agreed that it will not penalise its clearing customers for trading elsewhere.

The deal has been signed off by competition watchdogs in the US, but is waiting for a thumbs-up in Singapore.