NEWS UPDATE
REGULATION
S & P Global and IHS Markit get green light from European Commission for $ 44 billion megadeal
The deal has won conditional approval from Brussels after the Commission launched an investigation into the transaction due to competition concerns in September .
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& P Global has been given a conditional green light from the European Commission for its $ 44 billion acquisition of IHS Markit , announced in November last year .
If successful , the transaction would combine the business information providers ’ offerings to create a data and analytics powerhouse to rival that of Bloomberg and Refinitiv , offering extensive solutions across data , platforms , benchmarks and analytics across climate , energy transition and ESG .
In terms of annual revenue , S & P Global is currently third in the market after Bloomberg and Refinitiv , however , the addition of IHS Markit ’ s business has the power to change that .
The European Commission launched an investigation into the deal in September , which found that it had the potential to damage competition through price increases and a reduction in choice for participants in the market .
However , the Commission ’ s announcement on October 22 , said that remedies proposed by S & P Global and IHS Markit – including the divestment of IHS Markit ’ s Oil Price Information Service , and S & P Global ’ s CUSIP issuance and data licensing business , leveraged
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loan 100 index family , and its leveraged loan market intelligence product Loan Commentary and Data – satisfied its concerns around competition .
“ S & P Global and IHS Markit are leaders in the commodity and financial data markets ,” said Margrethe Vestager , executive vice-president of the Commission , in charge of competition policy . “ Without remedies , the merger would have limited customers access to some competitive and reliable data which is essential to ensure fairness of physical trades and financial markets .”
“ With this conditional approval , the problematic overlaps in commodity price assessments , and also in the area of loan identifiers and indices are fully removed , to the benefit of competition .”
Following the Commission ' s approval , S & P Global and IHS Markit said they expected the deal to close in the first quarter of 2022 .
However , the Commission was not the only regulatory body to raise competition concerns over the deal after the UK Competition and Markets Authority ( CMA ) also began looking into the deal in June , inviting participants to comment on the potential damage it could pose under the merger provisions of UK competition law in August .
The CMA updated the status of its inquiry on 19 October , concluding that the deal would damage competition , particularly in the supply of price assessments of biofuels , coal , oil , and petrochemicals in the UK .
It invited S & P Global and IHS Markit to submit proposals to address these concerns and prevent the deal being referred for a Phase 2 investigation , which could lead to conditional approval like that given by the Commission or even the prohibition of the merger altogether .