LSE shares surge higher on news of the deal; erstwhile Refinitiv owners will own 37% of LSE

The LSE Refinitiv deal just shook the ground beneath the offices of Bloomberg.

The three-hundred-year-old London Stock Exchange Group made a massive bid to extend its reach into data by agreeing to buy Refinitiv, the global provider of data and trading for a whopping $27 billion.

Now, investors anticipate that someone may finally give Bloomberg a run for its money. Renativ spun off from Reuters in 2018.

Growth through new markets and data capabilities

LSE CEO David Schwimmer said on a call that the blockbuster deal would allow LSE access to fast-growing markets such as Asia, and thrust into the buy-side territory.

LSE will also be ready for the new trend where customers increasingly use technology and data in operating their businesses. Refinitiv has over 40,000 institutional customers, and its terminals are widely used for trading and tracking prices.

The acquisition will pit LSE in competition with Bloomberg LP, a leader in financial news, data, and information services.

The LSE Refinitiv deal details

Following the LSE Refinitiv deal, private equity giant Blackstone Group Inc and other selling shareholders will hold a combined 37% stake in LSE.

LSE will assume a $13.5 billion bridge loan for the deal, and this will adversely affect leverage of the group, at least in the short term. Investors expect that the transaction will result in annual savings of $424 million within five years.

That said, the deal will create a new firm to compete against Bloomberg. The deal comes at a time that Bloomberg is attempting to shake things up. Bloomberg recently listed Blockchain project Cadence on its terminal.