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US rating agency S&P Global is to buy London-based market data and research company IHS Markit in an all-stock deal worth $44bn (£33bn) that will be the biggest corporate acquisition of 2020.

The deal, which IHS Markit’s chief executive, Lance Uggla, told employees in a memo had been in the works for the last few months, will create a heavyweight in the increasingly competitive market in financial information. It highlights the growing importance of big data in financial markets governed by information-hungry trading algorithms.

It is expected to close in the second half of 2021 if it can pass reviews by antitrust regulators who have been showing increasing interest in the sector.

“The next steps will be to receive regulatory approvals both in the US and the EU, which we expect to take between six to nine months, and receive approval by our respective shareholders,” Uggla said in the internal memo.

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Earlier today, THE FINANCIAL TIMES reported:

S&P Global is nearing a deal to buy IHS Markit for about $44bn, in an acquisition that would bring together two of the largest data providers and create a powerful challenger to information powerhouses Bloomberg and Refinitiv, according to people briefed on the matter.

A deal could be announced as early as Monday, said one person, as the two companies were finalising the agreement. The move would mark the latest round of consolidation among large data providers. New York Stock Exchange owner Intercontinental Exchanges struck its largest deal ever after it agreed to buy US mortgage data provider Ellie Mae for $11bn. That followed London Stock Exchange’s move to acquire Refinitiv for $27bn a year ago.

London-based IHS Markit had been considered a potential takeover target for a large exchange, in particular ICE, ever since the LSE reached its own agreement with Refinitiv.

One adviser, who was not directly involved in the talks between S&P Global and IHS Markit, said that even if the two reached an agreement it would still be possible for a rival buyer to gatecrash the deal with a higher offer. Dealmakers have become more comfortable with large-ticket transactions in recent months, emboldened by positive news of a Covid-19 vaccine and the end of the US election.

A deal between S&P Global, which has a market value of about $82bn, and IHS Markit, with a market capitalisation of $37bn, would be the largest this year.

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