London (CNN Business)The London Stock Exchange has agreed to buy financial data provider Refinitiv, creating a British rival to industry juggernaut Bloomberg.
Refinitiv shareholders will end up owning a 37% stake in the London Stock Exchange. The all-share deal values Refinitiv at $27 billion, including its debt.
The purchase comes less than a year after news and information provider Thomson Reuters (TRI) sold a majority stake in Refinitiv to a group of investors led by private equity group Blackstone.
The London Stock Exchange (LDNXF) and Refinitiv had combined revenue of £6 billion ($7.3 billion) in 2018. Together, the companies will be the world’s largest financial markets infrastructure provider.
The deal could give London Stock Exchange the scale needed to compete with industry heavyweight Bloomberg by combining the data generated by the exchange with Refinitiv’s distribution and analytics. It will also bolster the British company’s position in foreign exchange and fixed income trading through Refinitiv’s FXall and Tradeweb platforms.
Shares in the London Stock Exchange rose by 6% after the deal was announced.
Bloomberg, which was founded by billionaire former New York City mayor Michael Bloomberg, provides data feeds and messaging services used by traders, regulators and central bankers.
Refinitiv sells a rival product called Eikon.
The London Stock Exchange said it expects the deal to close in the second half of next year. Regulators are likely to scrutinize the takeover and its potential impact on market data costs.
Investors have objected to paying higher prices for market data, some of which they say is needed to comply with stricter regulations.
“Many trading venues have continued to increase market data fees,” five investor groups wrote in a letter last year to EU regulators.
“This reflects a marked and ongoing shift in the revenue model of trading venues, with market data now constituting a significant and increasing share of their income,” they added.