What’s Going On Here?S&P Global is restarting as it means to go on: the data and analytics company agreed on Monday to buy fellow data company IHS Markit for $44 billion. What Does This Mean?With markets having become increasingly computerized in the last few decades, financial data has exploded in popularity. This deal, then, would combine two of its biggest providers: S&P Global – best known for its bond ratings and stock market indexes, like the S&P 500 and Dow Jones Industrial Average – and IHS Markit, which tracks millions of financial data points.
The deal is an “all-stock” deal, meaning S&P Global will pay for IHS Markit using its own shares rather than nickels and dimes. And since there’s no cash to raise, that’ll make it far cheaper and more efficient. Investors sure seemed pleased: S&P Global shares were up after the announcement. Why Should I Care?Zooming in: Don’t mention the “R” word.
The deal is the latest in the race to put the “big” in Big Data: the London Stock Exchange, for instance, agreed to buy Refinitiv last year. But that deal is still under scrutiny from European regulators, which are concerned that combining the two companies – a move that would give them control of both the creation of data and its distribution – would enable them to block their competitors from the market. S&P Global and IHS Markit’s plan, then, isn’t a done deal just yet.
The bigger picture: Can I pay by stock, please?
If it does get the go-ahead, this deal will be 2020’s biggest (tweet this). And that’s in a year where – aside from a quiet few months where companies held their breath – deals have been all the rage, even hitting record highs in September. Businesses are increasingly using their own shares to pay for them too – probably because stock markets’ own all-time highs have given them plenty of money to spend. | 