New York-based financial services giant Citigroup Inc. (Citi) is selling its fixed-income indexing and analytics businesses to the London Stock Exchange Group PLC (LSE) for US$685 million.
Citi’s decision to sell the Yield Book and Citi Fixed Income Indices, including the World Government Bond Index, to the LSE follows a strategic review process. The deal is subject to regulatory approval and other closing conditions; the expected to close is in the second half of 2017.
“These businesses will become part of a global financial market infrastructure group with a demonstrated track record of delivering high-quality index and analytics services to its clients,” says Okan Pekin, Citi’s global head of investor services, in a statement. “We look forward to a long-term, productive partnership between London Stock Exchange Group and Citi. This divestiture is consistent with Citi’s strategy of focusing on its core businesses.”
For the LSE, the deal will build on the U.S. market presence and global fixed-income client base of its FTSE Russell division. The firm expects to generate annual revenue synergies of US$30 million and cost synergies of US$18 million through new product opportunities and operational efficiencies.
“The acquisition represents a significant step for FTSE Russell to acquire a world-class fixed-income analytics and index business, enhancing our ability to provide customers with broader multi-asset capabilities and a deeper data and analytics offering,” says Mark Makepeace, group director of information services and CEO of FTSE Russell, in a statement.