S&P Global announced Monday that it would acquire IHS Markit for USD 44bn, in an all-stock deal that would combine two of the largest data providers on Wall Street.

The deal would marry S&P’s expertise in providing country- and company-level debt ratings and data on capital and commodity markets, with IHS’s pricing and reference data, particularly within the automotive, energy, financial services, defence and maritime sectors.

The announcement comes at the end of a busy year for data provider consolidations.

• CoStar to buy residential real estate data platform
• FactSet to acquire TruValue Labs
• Location data consolidations continue with PlaceIQ/Freckle IoT merger
• Knoema buys alternative data platform Adaptive Management
• Amplity Health acquires RealHealthData
• Visa acquires Plaid for USD 5.3bn

Though data provider consolidations have ratcheted up over the past 12 months, the desire to create an integrated trading and data platform is not a new one, particularly as exchanges snap up data vendors in order to diversify their revenue streams. Last year, the London Stock Exchange Group announced its plans to acquire Refinitiv and recently said it expects the deal to close in the first quarter of next year. In 2018, Nasdaq bought data provider Quandl and in 2015, Intercontinental Exchange acquired Interactive Data Corporation, a provider of financial market data and analytics.

Market insiders have generally been excited about the S&P and IHS merger, noting that the two firms have complementary offerings and the combination will create a massive portfolio of data assets. However, some noted that the integration process for the two companies could be a lengthy process.

S&P has been expanding its presence in the alternative data world recently. In May, it launched the S&P Global Marketplace, a data platform that lets clients discover and evaluate new datasets across all four S&P divisions, as well as select third-party alternative data providers. It also acquired the ESG ratings business from RobecoSAM last year and import/export data provider Panjiva in February 2018.

The deal is the largest corporate merger of 2020 to date. Under the terms of the merger agreement, S&P shareholders will own 67.75% of the combined company, while IHS Markit shareholders will own 32.35%.

The deal is subject to regulatory approval, and some legal experts have predicted that the deal could face opposition from the Biden administration on anti-trust grounds. However, the companies have said they expect it to close in the second half of 2021.

Photo by JJ Ying on Unsplash