The London Stock Exchange (LSE) has announced today that the expected closing of its proposed acquisition of Refinitiv, the financial data provider, will occur on the 29th of January, 2021. The acquisition deal, worth a hefty $27 billion, still stands subject to outstanding scrutiny, however. As such, the green light has yet to be given, but the LSE apparently expects that to happen quite soon.
Some Raised Concerns
The existing shares of Refinitive will be written off from the Main Market of the LSE. From there, it will be re-submitted under a news ticker at 8:00 AM on the 29th of January, 2021. It’s the intent of LSE to reapply for admission on its own market, as the Refinitive deal itself stands as a reverse takeover within the listing rules of the UK.
This comes after the European Commission, the watchdog in charge of the EU’s 27-nation bloc’s competition policy, had given the green light for this all-stock deal back in December of 2020.
It should be noted, however, that the Commission had officially identified a number of concerns regarding this deal during the investigation process. Even so, the EU watchdog was confident that there are a number of remedies to address this issue with.
Deal Sees LSE And Refinitive Becoming Mega-Player In EU
Regulators further cited the sheer scope of complexity and data this deal involves, which would ultimately result in a combined market share of considerable size within Europe’s government bond electronic trading space.
Another key concern was regarding the fact that a new trading venue might struggle to attract sufficient numbers of customers in order to serve as a true alternative to this new combined business. Prior to the acquisition, LSE and Refinitiv had been close rivals, with both their venue leaders in the space.
European competition authorities have long since been a powerful obstacle for various cross-border alliances. As always, these watchdogs are concerned that the combined entity from this merger would hold too much control within the market data space.
In order to try and ease concerns for this very matter, LSE has consented to a number of remedies to the matter. One of the more prominent is the open-access offering of its global OTC derivative clearing services.
UK and US Aren’t So Worried
As it stands now, the regulators from the US and the UK have both cleared this all-stock deal, as revealed back in August of 2019. In particular, the Committee on Foreign Investment in the United States (CFIUS) stated that this takeover deal raises no concerns regarding national security.
The terms of the deal show that Refinitiv, led by Blackstone, will own a total of 37% of the combined group’s shares. Thomson Reuters, the former owner, will boast a 15% holding within the new company, as well. Through doing so, it stands to become one of the LSE’s biggest shareholders, having the right to name three directors.