The London Stock Exchange (LSE) plans to acquire Refinitiv, the trading platform by Thomson Reuters and Blackstone at $ 27 billion. This move will elevate the company from prey to a predatory space in the global financial space, allowing it to challenge players like Bloomberg. News of the anticipated acquisition saw LSE’s share jump by 15% to hit an all-time high of 6,547 pence. The jump, some analysts say would subject the acquisition to keen scrutiny, both at antitrust approval and at European Commission level.
While many expect an easy approval of the acquisition by the European Commission, a few problems could arise. First, the LSE-Refinitiv union would make the London giant a provider and distributor of market data; a fact that might raise regulators’ brows. Second, Refinitiv’s over the counter trading avenues combined with LSE’s stake in LCH’s clearing house is bound to call for scrutiny. Lastly, The European commission killed the LSE – Deutsche Börse merger, will it approve this one?
The acquisition seems to be a win-win power move for all stakeholders. LSE will benefit from Refinitiv’s trading platform, allowing it to automate trading and distribute data. The takeover will allow the bourse operator to expand its information services, threatening competitors like Deutsche Börse and Intercontinental Exchange. On the other hand, Blackstone, Refinitiv’s major shareholder will have doubled its investment in Refinitiv in nine months and inadvertently own approximately 20% share of the newly formed group. On the other hand, Reuters would own approximately 17% of the shares in the group owing to last years’ warrants that granted Thomson Reuters 47.6% ownership of Refinitiv from the original 45%.