Microsoft is buying nearly a 4% stake in the London Stock Exchange Group (LSEG) as part of the company’s newly announced 10-year commercial partnership. LSEG’s shares jumped more than 3.7% on the deal’s announcement.
Microsoft’s 10-Year Partnership with the London Stock Exchange
Microsoft is set to buy a stake in the London Stock Exchange Group (LSEG) of nearly 4%, the companies announced Monday. The move comes as part of Microsoft’s 10-year partnership with the UK stock exchange operator to help it shift its operations to the cloud.
According to Microsoft, the primary focus of the deal will be the digital transformation and migration of LSEG’s tech infrastructure and Refinitiv platforms to the Microsoft Cloud. Shares of LSEG surged over 4% on the announcement.
Under the terms of the partnership, LSEG will gain access to sophisticated data and analytics, as well as cloud computing products. The UK bourse operator will be provided with next-gen data infrastructure and modeling solutions through Microsoft’s flagship offerings like Azure, AI, and Teams.
“Bringing together our leading data sets, analytics, and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies.”
– David Schwimmer, CEO of the London Stock Exchange Group.
LSEG also entered a contractual agreement with Microsoft to spend a minimum of $2.8 billion on cloud-related products with the tech giant. LSEG said the agreement is “consistent with existing long-term” spending plans.
Further, the two companies will work together to build new professional collaboration solutions. The UK stock exchange developed a data and analytics platform Workspace, which the companies will advance and integrate with Microsoft Teams.
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Microsoft’s Pending Deal With Activision Blizzard At Further Risk
The deal with Microsoft comes more than a year after LSEG acquired the financial market data and infrastructure provider Refinitiv for $27 billion. The purchase turned the UK stock exchange into the second-largest financial data company after Bloomberg LP.
Since acquiring Refinitiv, LSEG has witnessed significant progress on its program to deliver its cloud-powered data platform, the exchange said in a statement. The sale of a 4% stake to Microsoft is expected to complete in Q1 2023.
Meanwhile, Microsoft continues to face regulatory hurdles for its $68.7 billion pending acquisition of Activision Blizzard, announced in January 2022. Last week, the Federal Trade Commission (FTC) said it will take legal action to block the deal due to antitrust concerns. The tech behemoth also recently participated in a $46 million funding round raised by Wemade, a South Korea-based Web3 firm.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.