London Stock Exchange has confirmed it is in talks to acquire Refinitiv in a US$27 billion deal.
The deal would see the stock exchange buying Thomson Reuters' 45% stake in Refinitiv, a global provider of financial markets data and infrastructure that generated $6.3 billion in revenue last year.
If the deal goes ahead, the LSE and Refinitiv would together be the largest listed global financial markets infrastructure provider by revenue, turning the LSE into the main rival of Michael Bloomberg's financial news and data empire.
It would also transform the LSE, currently best known for running stock exchanges and clearing derivatives, into a more diversified market data and analytics leader.
"The combined business would create a leading, UK headquartered, global financial market infrastructure provider with significant multi-asset capital markets capabilities, a leading data and analytics business and a broad post-trade offering, well-positioned for future growth in an evolving landscape," the LSE said.
The proposed deal comes less than a year after Blackstone bought a majority stake in Refinitiv, with a private equity consortium, from Thomson Reuters in a US$20 billion deal.
Refinitiv had US$12.2 billion in debt as of the end of December from its leveraged buyout by Blackstone, which the LSE would assume under the proposed deal. Because of this, the exchange would pay for the transaction entirely by issuing new shares.
Refinitiv holders may receive a stake of approximately 37%, the LSE said in a statement, though they will have less than 30% of its voting rights.
The announcement has seen LSE shares hit a record high, rising more than 15% on Monday to close at 6562 pence.
Under the transaction terms, the LSE would continue to be chaired by Don Robert and led by chief executive David Schwimmer, with David Warren as chief financial officer.