S&P agrees to pay a staggering $44 billion for IHS Markit, but will it be allowed?

Although the deal is yet to be approved by regulators, and could be thwarted if deemed to create a data monopoly, IHS Markit’s sale represents a potentially massive transaction and shows that data is the absolute essence of the future of markets.

Data, and its vital importance in capital markets, is most certainly the order of the day.

The astonishing price that S&P has agreed to pay for IHS Markit, about which CEO Lance Uggla told employees in a memo had been in the works for the last few months, highlights the growing importance of big data in financial markets governed by trading algorithms.

The $44 billion price tag which S&P will pay in stock would make the deal the largest of 2020, a boost for the market after the pressures of the during this year in which many companies in other sectors have been forced into decline by anti-business government ideology.

Of course, the entire acquisition proposal has to be approved, and a merger is likely to draw the attention of regulators, with the deal making the market for financial information even more concentrated. It is certainly of note that London Stock Exchange’s proposed oxymoronic “Merger of Equals” with Deutsche Boerse never went ahead – something that FinanceFeeds had stated from the very beginning of the talks between the two venues, on the basis that a liquidity monopoly would be created and power would be moved to Germany.

Thus, as the deal has been agreed, it has yet to face scrutiny from mergers commissions, regulators and anti-monopoly government think tanks. Any thwarting of it would be somewhat hypocritical, however, as Amazon’s AWS has been allowed to have a total data monopoly in the retail FX and CFD world, as it is the only government recognized hosting solution for trade reporting. Wonder how that happened?

The same goes for Alibaba founder and Chinese communist party plant Jack Ma, whose ANT business has aspirations of controlling the global financial data market by listing on a public exchange and expanding worldwide. Thankfully the Chinese government scored an own goal with that one and put a stop to it… for now.

This monumental potential acquisition follows a year after the London Stock Exchange’s $27 billion purchase of Refinitiv, which is still yet to be approved by regulators in the European Union, and during the summer of this year, New York Stock Exchange owner Intercontinental Exchange struck its largest deal ever after it agreed to buy US mortgage data provider Ellie Mae for $11 billion.

Ratings giant S&P was formed in 2011 when former parent firm McGraw-Hill spun it out from its education business, and the company is best known for providing credit ratings for countries and companies, as well as global market information.

IHS Markit is perhaps best known for supplying the monthly Purchasing Managers’ Index (PMI), a measure of economic performance.

The company was formed in 2016 from the merger of data firm IHS and Markit, which was founded by former credit trader Lance Uggla. That deal was worth around $6 billion.

Now, Mr Uggla is going solo, investing in cybersecurity. Does he know something we don’t?

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