S&P Global To Acquire IHS Markit For $44B, Creating A Wall Street Data Behemoth

S&P Global Inc. SPGI confirmed early Monday it is acquiring IHS Markit Ltd. INFO in a deal that values the latter at $44 billion, including $4.8 billion of net debt. 

What Happened: The Wall Street Journal had reported on the merger plans earlier on Sunday, citing people familiar with the matter.

The Board of Directors of both companies unanimously approved the deal. Post-merger, existing S&P Global shareholders will control about 67.75% of the resultant company while IHS Markit stakeholders will control about 32.25%.

As part of the deal, each share of the IHS Markit common stock will be exchanged for 0.2838 shares of S&P Global common stock.

"We are confident that the strengths of S&P Global and IHS Markit will enable meaningful growth and create attractive value for all stakeholders," S&P Global President and CEO Douglas Peterson said in an emailed statement to Benzinga.

The financial services provider's Chief Communications Officer Dave Guarino earlier on Sunday told Benzinga that the company would not "comment on market rumors or speculation."

"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 IHS Markit CEO Lance Uggla.

Current S&P Global Chairman Richard Thornburgh will also serve as the chairman of the combined company.

Why It Matters: The merger of the two companies will create a financial data behemoth.

The Manhattan-based S&P Global and London-based IHS Markit are two of the largest financial data and analytics providers to Wall Street.

S&P Global has a market valuation of $82.18 billion and IHS Markit is worth about $36.88 billion.

The two companies expect the resultant entity to generate annual cash flow above $5 billion by 2023, maintaining a strong balance sheet and credit profile.

They said pro forma annual revenue is expected to be above $11.6 billion for the new company, and it would target 200 basis points of annual EBITDA margin expansion.

Price Action: S&P Global shares traded 1% lower at $338 in the pre-market session Monday. IHS Markit shares traded 6.9% higher at $99.