S&P Global is buying IHS Markit in a $44 billion all-stock deal that joins two of the largest data providers to Wall Street.
Data collection has become pivotal on Wall Street as algorithms and high-speed trading overtake the traditional picking of stocks. Growth has been explosive for companies that do it well.
IHS and Markit joined just four years ago to create a $13-billion company. The company has almost tripled in value since then, and is now worth close to $37 billion.
And the size of the deal announced Monday is the largest of the year, bigger than Nvidia’s acquisition of rival chipmaker Arm Holdings for $40 billion in September, and Nippon Telegraph & Telephone’s acquisition of a subsidiary for nearly that much in the same month.
The newcomer IHS Markit is being acquired by a company with roots dating back to the 19th century, when Henry Varnum Poor published the History of the Railroads and Canals of the United States to provide transparency for investors.
IHS Markit, based in London, has more than 50,000 business and government customers, including 80% of the Fortune Global 500 and the world’s leading financial institutions.
Each share of IHS Markit common stock will be exchanged for a fixed ratio of 0.2838 shares of S&P Global stock. Current S&P Global shareholders will own approximately 67.75% of the combined company, while shareholders of IHS Markit, based in London, will own about 32.25%.
The transaction puts IHS Markit’s enterprise value at $44 billion, including $4.8 billion of debt.
The combined company will be headquartered in New York, where S&P Global is based, with a substantial presence in key global markets across North America, Latin America, Africa and Asia.
Douglas Peterson, the CEO of S&P Global, will hold that title at the combined company. Lance Uggla, chairman and CEO of IHS Markit, will become a special advisor to the company for a year after the deal closes.
The transaction is expected to close in the second half of next year. It needs the approval of both companies’ shareholders.
Shares of IHS Markit rose more than 5% in Monday premarket trading. S&P Global’s stock fell 1.6%.