S&P Global announced on Monday that it has entered a definitive agreement to buy IHS Markit in an all-stock transaction. The deal will see IHS Markit valued at $44 billion, including $4.8 billion of net debt. The deal stands to be the biggest merger of 2020, creating a heavyweight in financial information market. The deal is expected to close in the second half of 2021.
This deal signals recovery in the merger and acquisition segment as developments on the COVID-19 vaccine front revived economic outlook across the world. The deal will also be closely watched by competition and antitrust regulators as it substantially concentrates financial information market by bringing together two major players.
As per the merger agreement, each share of IHS Markit will be exchanged for a fixed ratio of 0.2838 shares of S&P Global. Once the deal is closed, current S&P Global shareholders will own approximately 67.75 per cent of the merged entity on a fully diluted basis, while IHS Markit shareholders will own approximately 32.25 per cent.
The merged entity will be a pro forma company that will offer solutions across data, platforms, benchmarks and analytics in ESG, climate and energy transition, S&P Global and IHS Markit said in a joint statement. The new-formed company will benefit from increased scale and mix across core markets with attractive growth adjacencies.
Post-deal, Douglas Peterson, President and Chief Executive Officer of S&P Global, will serve as CEO of the combined company. Lance Uggla, Chairman and Chief Executive Officer of IHS Markit, will stay on as a special advisor to the company for one year following closing.
"Through this exciting combination, we are able to better serve our markets and customers by creating new value and insights. This merger increases scale while rounding out our combined capabilities, and accelerates and amplifies our ability to deliver customers the essential intelligence needed to make decisions with conviction... We have been impressed by the IHS Markit team and look forward to welcoming the talented IHS Markit employees to S&P Global," said Peterson.
S&P Global is renowned 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 Ltd for around $6 billion. Markit, founded by former credit trader Lance Uggla, provides a range of pricing and reference data for financial assets and derivatives.