Connect with us

Hi, what are you looking for?


S&P Global’s $39-billion IHS deal shows market data’s dominance

S&P GLOBAL, Inc. grew out of a firm that provided bond ratings and railroad data. IHS Markit Ltd. traces its roots to a British barn and an effort to offer prices for the opaque world of credit derivatives.

Now, the second-biggest acquisition of 2020 will combine the two into a data Goliath that tracks everything from the price of wheat to the movements of hundreds of thousands of ships criss-crossing the world’s oceans.

The $39-billion deal underscores the central role of data in financial markets and the ever-growing demand from investors for information that gives them an edge in increasingly fast and computerized markets. Global spending on market data and analysis rose almost 6% to $32 billion last year, according to Burton-Taylor International Consulting.

“Data is the lifeblood of markets,” said Roman Ginis, chief executive officer (CEO) of Imperative Execution, an equities-trading venue. “Diversifying into data makes a lot of sense, and the more people need this data, the more you can charge for it.”

S&P is widely known for its ratings and index businesses, and the purchase of IHS Markit would give it a stronger foothold in more opaque markets for financial derivatives including credit default swaps and collateralized loan obligations. In commodities, S&P Global Platts is the main provider of benchmark prices for key raw materials, including oil and refined products. That business could be complemented by IHS Markit’s maritime products, which include ship tracking, port data and information on trade flows.

In an interview, S&P Global CEO Doug Peterson said the small business of providing data on energy transition and climate initiatives could be one of the biggest areas of growth. IHS Markit CEO Lance Uggla said the indexing and private markets business could also bring new opportunities.

“With IHS Markit, they’ve got benchmarks and data on battery metals, hydrogen, wind, solar, biofuels, as well as information that’s coming out of every single car in the United States,” Peterson said in a Bloomberg Television interview. “That is a real exciting growth area.”

Bloomberg LP, the parent of Bloomberg News, competes with IHS Markit and S&P Global in providing financial analytics and information. Other providers include Moody’s Analytics, FactSet and Intercontinental Exchange, Inc., according to Burton-Taylor.

Some recent transactions in the industry have come under scrutiny. London Stock Exchange Group Plc is still negotiating with the European Union over its agreement last year to acquire Refinitiv Holdings Ltd. for $27 billion, over concerns that the company’s control of data could make it the gatekeeper for an entire industry.

But Bloomberg Intelligence analyst Larry Tabb said he doesn’t see significant antitrust risk in the S&P deal. The primary competitive overlap between the companies’ businesses is in energy research and data, but otherwise they have different specialties, he said.

Mr. Peterson said on a conference call with analysts Monday that S&P doesn’t foresee any regulatory issues “that can’t be resolved if they do come up.”

The deal will likely get separate scrutiny from merger regulators in the European Union and UK as the British authority starts weighing deals after the country’s exit from the EU.

The combination could also reduce S&P Global’s reliance on a ratings business whose fortunes are somewhat tied to market activity. IHS Markit said almost 90% of its revenue in the nine months ended in August was recurring.

S&P shares rose 3% in New York trading. IHS shares climbed more than 7%.

“With a more diversified portfolio of assets and increased visibility (i.e. more recurring revenue) on earnings, we believe the combined entity can command a higher earnings multiple longer term,” Oppenheimer & Co. analyst Owen Lau wrote in a note. “We believe the potential merger will benefit the shareholders of both companies.”

IHS Markit has grown rapidly over the past two decades and has faced regulatory concerns about competition before. A civil probe by the US Justice department (DoJ) examined whether banks conspired to use Markit before the financial crisis to maintain their dominance in credit-default swaps and prevent new players from gaining a foothold. The DoJ probe was dropped after government concerns were addressed by new rules under the Dodd-Frank Act, people said at the time.

The European Commission said in 2013 it probed difficulties faced by Deutsche Boerse AG and Chicago-based CME Group, Inc., two of the world’s largest derivatives clearinghouses, as they sought to start a central clearing platform for instruments including credit default swaps from 2006 to 2009. Markit and the International Swaps and Derivatives Association, which was also under investigation, settled the claims in 2016. — Bloomberg

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



GROSS BORROWINGS by the National Government had reached P2.75 trillion as of end-October as it continued to raise money for its pandemic response, preliminary...


By Luz Wendy T. Noble, Reporter THE PHILIPPINE Statistics Authority (PSA) said the base year for the consumer price index (CPI) will change to...


SOME INDIAN COMPANIES, including those from the pharmaceutical industry, are interested in investing in economic zones in the Philippines, according to an India Business...


By Keren Concepcion G. Valmonte, Reporter HOSPITALITY GROUPS expect a rebound in tourism as coronavirus disease 2019 (COVID-19) vaccination rates continue to improve and...


BUSINESSWORLD’s Luz Wendy T. Noble was recognized as the Best Reporter of the Year for Banking at the 30th annual awards of the Economic...


THE Securities and Exchange Commission (SEC) has flagged eight more entities in separate advisories for their unregistered investment solicitation programs. These offerings are PH...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.