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The European Commission said on Wednesday it approved the $27bn (£22bn) acquisition of Refinitiv by the London Stock Exchange (LSE.L) Group. LSE’s shares were roughly 1.8% higher Wednesday afternoon.
The EC’s executive vice-president Margrethe Vestager, in charge of competition policy, said the decision was made because LSE showed “it will ensure that the markets will remain open and competitive and the acquisition will not lead to higher prices or less choice and innovation for these products.”
The approval is conditional on full compliance with a commitments package offered by LSE.
LSE is a global financial markets infrastructure business that also offers financial data products while Refinitiv is a provider of financial data products. It also controls Tradeweb, which operates trading venues.
“Infrastructure competition in trading services and access to financial data products on fair and equal terms is essential for the European economy and in particular for consumers and businesses,” Vestager added.
The EC’s announcement comes after an in-depth investigation of the proposed transaction.
The Commission said its probe focused on trading services for European Governments Bonds, as well as on the provision of financial data products and the provision of trading and clearing services for over-the-counter interest rate derivatives.
In October last year, LSE agreed to sell Borsa Italia to French rival Euronext, expecting the sale of the Italian stock exchange to help it overcome the EU regulatory obstacle of its Refinitiv buy.
"We believe the sale of the Borsa Italiana group will contribute significantly to addressing the EU's competition concerns,” LSE’s CEO David Schwimmer had said at the time.
Back in 2019, LSE agreed to takeover Refinitiv, in a move that has the potential to transform the group into a rival to Bloomberg.
The all-share deal will see the stock exchange group acquire Refinitiv from private equity giant Blackstone, which owns 55% of the company, and Thomson Reuters, which owns 45%.
Refinitiv is the former financial data division of Thomson Reuters, which owns the Reuters news agency.
While the London Stock Exchange is best known for operating stock exchanges and its derivatives clearing business, the acquisition will allow it take control of a company that provides the data and financial markets infrastructure to many trading floors across the world.
“The acquisition of Refinitiv is transformational,” Schwimmer had said in 2019.
“It is a rare and compelling opportunity to combine two world class businesses and create a global financial infrastructure leader. We will continue to be a global business headquartered in the UK,” he added.
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