Topline
Microsoft plans to buy a 4% stake in the London Stock Exchange Group, the U.S. tech giant announced on Monday, part of a decade-long partnership designed to enhance the exchange’s data and analytics offerings as firms race to develop tools allowing investors to leverage the vast amounts of data now available to them.
Microsoft said it will buy a 4% stake in the London Stock Exchange Group.
Key Facts
Microsoft will acquire 4% of LSE’s shares from the Blackstone/Thomson Reuters Consortium, a group of companies that sold the exchange Refinitiv, a data and analytics business, in 2021.
The deal is part of a 10-year partnership to migrate the exchange’s data platform and tech infrastructure to the cloud and develop LSE’s data and analytics business, Microsoft said.
LSE will spend a minimum of $2.8 billion on cloud-related products with Microsoft over the 10-year period, the company added.
The deal will also grant Microsoft a seat on LSE’s board and the firm said it intends to appoint Scott Guthrie, Microsoft’s executive vice president for the cloud and AI group, as a non-executive director.
David Schwimmer, LSE CEO, said the partnership with Microsoft is a “significant milestone” on the group’s journey towards becoming the leading financial markets infrastructure and data business in the world.
Microsoft chairman and chief executive Satya Nadella, said advances in the cloud and artificial intelligence are set to “fundamentally transform” how financial institutions operate and welcomed the deal as a way to “build next-generation services” to empower users and automate “complex and time-consuming processes.”
Tangent
London Stock Exchange Group shares were up 4% on Monday morning following the announcement.
What To Watch For
Microsoft said it expects to complete the purchase in the first quarter of 2023. The firm said LSE will update its investors on how the programs promised as part of the deal will be delivered later in 2023.
Key Background
The deal comes as firms race to develop tools allowing investors and analysts to leverage the massive amounts of data available to reach new or better insights for investment opportunities faster. The deal—which brings together a major player in the financial data space and one of the world’s biggest tech companies—could possibly help Refinitiv, which LSE purchased in 2021, trounce Bloomberg in the decades-long fight to be the world’s leading provider of financial data and analytics. The partnership with Microsoft comes after a number of failed mergers for LSE as part of its efforts to become a global enterprise.
Further Reading
Source: https://www.forbes.com/sites/roberthart/2022/12/12/microsoft-to-buy-4-stake-in-london-stock-exchange-as-part-of-10-year-deal/