The combined company is expected to result in annual costs savings of approximately $480 million a year, the statement said. Cost savings would include optimizing the real estate footprint, S&P Chief Financial Officer Ewout Steenbergen said on a conference call.
Markit was founded in a U.K. barn by Uggla, a Canadian who spotted an opportunity to provide pricing for the opaque world of credit default swaps just as trading of the derivatives was taking off in the early 2000s. Uggla built up the company through a breakneck series of acquisitions, culminating in the 2016 merger with IHS. A 2014 IPO of Markit valued it at about $4.5 billion. The company has more than 5,000 analysts, data scientists, financial experts and industry specialists.
Regulatory Scrutiny
Regulatory scrutiny could pose one risk for the tie-up, given the overlap between the firms’ data offerings, according to Craig A. Huber, founder of Huber Research Partners LLC. The LSE is still negotiating with European Union regulators over its deal for Refinitiv, with competition authorities expressing concerns over how some companies’ control of data can make them gatekeepers for an industry.
“Antitrust could be an issue since both are market data providers,” said Jin Rui Oh, director at United First Partners, an investment and advisory group that specializes in special situations. “That could be a little tricky.”
This article was provided by Bloomberg News.