S&P, IHS merger focuses on technology, ESG growth

S&P Global plans to buy IHS Markit, a move that will further consolidate global financial technology, data and ratings providers to form a new company that will increase its focus on ESG and climate.

“Combined, the two companies will provide comprehensive solutions across data, platforms, benchmarks and analytics in ESG, climate and energy transition,” according to a press release announcing the deal.

It is unclear how or if the merger would affect IHS Markit's current municipal benchmarks, yield curves, pricing services and evaluations, but IHS has already been growing its presence in the muni space using technology and data collection capabilities to bring ESG, green and climate change information to municipal investors and issuers.

IHS Markit, which had acquired Ipreo, also in recent years expanded in municipal space domestically and globally through buy- and sell-side platforms.

Neither S&P Global nor IHS Markit would comment beyond the press release.

"This transaction is a win for both IHS Markit and S&P Global as we leverage our respective strengths in information, data science, research and benchmarks," said Lance Uggla, chairman and CEO of IHS Markit, in the release.

Douglas Peterson, president and chief executive officer of S&P Global during a 2019 television interview.

“Serving a global customer base across financial information and services, ratings, indices, commodities and energy, and transportation and engineering, the pro forma company will provide differentiated solutions important to the workflows of many of the world's leading companies,” the companies said.

The merger follows other financial information companies that have consolidated financial data technology to expand their reach globally.

The London Stock Exchange, which acquired Refinitiv, the parent company of Municipal Market Data, Lipper and SDC, provides the MMD suite of muni yield curves for the municipal market.

Intercontinental Exchange, parent of ICE Data Services and their yield curves, pricing and evaluations, also owns the New York Stock Exchange. It also has grown its focus on ESG, green and climate space through partnering with climate research firms.

Bloomberg LP also provides financial data services with a focus on "green" and competes with the companies.

The S&P Global and IHS Markit agreement to combine in an all-stock transaction, which values IHS Markit at an enterprise value of $44 billion, including $4.8 billion of net debt.

The combined company “will be differentiated in attractive high-growth adjacencies, including ESG, climate and energy transition, private assets and SME, counterparty risk management, supply chain and trade, and alternative data, which together represent $20 billion of total addressable market, growing at least 10% annually,” according to the release.

“As part of its ongoing commitment to remain on the cutting edge of technology and innovation, the combined company will continue to deploy well above $1 billion annually on technology.”

“We are confident that the strengths of S&P Global and IHS Markit will enable meaningful growth and create attractive value for all stakeholders,” said Douglas Peterson, president and CEO of S&P Global. “We have been impressed by the IHS Markit team and look forward to welcoming the talented IHS Markit employees to S&P Global."

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