The London Stock Exchange (LSE), which has placed a bid to acquire Refinitiv for $27 billion, will not offer concessions to European Union antitrust regulators regarding the acquisition, according to two people familiar with the matter.
In a report by Reuters, the unnamed sources said that the EU’s antitrust regulator, the European Commission (EC), is expected to launch an investigation into the acquisition, and given the fact that the LSE won’t offer any concessions, the investigation could take four months, the news outlet said.
As Finance Magnates reported, LSE is committed to closing the transaction in the second half of this year, with the exchange group already having secured approval from the Committee on Foreign Investment in the United States (CFIUS).
The acquisition could be the biggest M&A deal in the intermediary sector this year and will see the LSE become a UK-headquartered, global rival to Bloomberg. However, the investigation will look into the overlapping activities between the two companies.
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Following the acquisition, shareholders of Refinitiv, a consortium of investment funds affiliated with Blackstone as well as Thomson Reuters, will hold an approximate 37 per cent stake in LSEG and under 30 per cent of the total voting rights of the Group.
Fixed income to be key area of focus in LSE bid
In particular, fixed income trading will likely to be a key focus of the probe, the sources said. Furthermore, the potential impact the deal might have on the price of financial data will also be a key area.
The preliminary inquiry from EU regulators will end on the 22nd of June 2020. The LSE has until then to propose any concessions to address competition concerns raised during the process.
According to analysts, some possible early concessions the exchange group could make would be to separate its MTS government bond platform of sell Refinitiv’s stake in Tradeweb, a bond trading platform.
LSE and the EC have both declined to comment on the issue, and the news outlet was unable to get a response from a spokesperson from Refinitiv.