S&P Global to buy IHS Markit in $44 billion mega-deal

Data giant S&P Global has agreed to buy IHS Markit in an all-stock deal worth $44 billion that will be the biggest corporate acquisition of 2020 and create a heavyweight in the increasingly competitive market in financial information. The mega-deal, which IHS Markit Chief Executive Officer Lance Uggla told employees in a memo had been in the works for the last few months, highlights the growing importance of big data in financial markets governed by information-hungry trading algorithms.

It is expected to close in the second half of 2021 if it can pass reviews by antitrust regulators who have been showing increasing interest in the sector. S&P Global is best known for providing debt ratings to countries and companies, as well as data on capital and commodity markets worldwide. It became a standalone business in 2011 when its then parent McGraw-Hill separated S&P from its education business.

IHS Markit was formed in 2016 when IHS, whose businesses range from data on automotive and technology industries to publishing Jane’s Defence Weekly, bought Markit for around $6 billion. Markit, founded by former credit trader Uggla, provides a range of pricing and reference data for financial assets and derivatives. IHS has a market value of around $36.88 billion based on the stock’s last close on Friday, a Reuters calculation showed, with its share price up around 22% so far this year.

As part of the deal, which includes $4.8 billion of debt, each share of IHS Markit will be exchanged for a ratio of 0.2838 shares of S&P Global stock, the two companies said. S&P Global shareholders will own roughly 67.75% of the combined company and the rest will be held by IHS shareholders. Douglas Peterson, CEO of S&P Global, will lead the combined firm, while Uggla will be a special advisor for a year after the deal closes. The Wall Street Journal reported news of the deal earlier on Monday.

IHS shares rose nearly 6% in trading before the bell, while S&P Global was down about 2.5%.