S&P Global has agreed to buy rival financial data provider IHS Markit for $44 billion in the largest merger deal of the year, the companies announced Monday.
The massive all-stock tie-up will create a powerful player in the competitive financial information market by uniting one of the industry’s oldest firms with a younger competitor that has seen rapid growth.
IHS Markit stockholders will trade in each of their shares in the company for about 0.3 shares of S&P Global stock under the terms of the deal, which is expected to close in the second half of next year. S&P’s existing shareholders will own about 68 percent of the combined company, while Markit stockholders will own the remaining 32 percent, according to a news release.
“This merger increases scale while rounding out our combined capabilities, and accelerates and amplifies our ability to deliver customers the essential intelligence needed to make decisions with conviction,” said S&P Global CEO Douglas Peterson, who will be chief executive of the combined firm.
The announcement sent IHS Markit’s stock price soaring 7.5 percent in premarket trading Monday to $99.50 as of 8:37 a.m., while S&P Global shares were recently down about 0.2 percent at $341.
S&P Global has been a mainstay in the financial services world for decades. While its history dates back to the 19th century, the New York-based company is best known today for its credit ratings and its benchmark stock indexes such as the S&P 500, which is used as a barometer for the US stock market as a whole.
London-based IHS Markit took its current form just four years ago but has become a major supplier of financial data with more than 50,000 business and government customers. The company grew out of Markit’s 2016 takeover of American database provider IHS.
The mega-merger comes amid a ramp-up in dealmaking as progress toward coronavirus vaccines raises hopes that the economy will soon recover from the deadly global pandemic. More than $1 trillion worth of deals were recorded in the July-to-September quarter, with transactions mostly concentrated in resilient industries such as technology and health care, Refinitiv data show.
With Post wires