Microsoft is acquiring a 4 percent stake in the London Stock Exchange Group (LSEG), the company that owns the London Stock Exchange as well as several other companies including financial markets data company Refinitiv, which LSEG acquired from a Blackstone/Thomson Reuters consortium last year for year $27 billion.
Microsoft’s stake, which it bought from the same Blackstone/Thomson Reuters consortium, is part of a larger 10-year partnership that includes a contractual commitment for LSEG to spend at least $2.8 billion on cloud computing services . To do this, LSEG will migrate its data platform and “other key technology infrastructure” to Azure, while integrating the Workspace data and analytics product it procured as part of its Refinitiv acquisition last year with core Microsoft applications like Teams and the broader Microsoft 365 becomes software suite.
This initial partnership will create a single product encompassing data, analytics and collaboration, and could help LSEG challenge companies like Bloomberg as the go-to place for finance and investment professionals.
The integration will allow all LSEG customers to collaborate via teams and generate, for example, models and diagrams by connecting LSEG content and Excel. The scope of the partnership appears to be quite wide-ranging, however, with plans to mesh Microsoft’s cloud-based machine learning capabilities with LSEG’s analytics and models to co-develop “a new suite of solutions” for financial institutions, the companies said.
So this is a win-win for both companies: a huge cloud deal for Microsoft, opening it up to Refinitiv’s 40,000 customers, and an equity stake in a major challenger to Bloomberg. And for LSEG, it now has the technological and financial backing of one of the world’s largest public cloud companies.
“Combining our leading datasets, analytics and global customer base with Microsoft’s comprehensive and proven cloud services and global reach creates attractive revenue growth opportunities for both companies,” said David Schwimmer, CEO of LSEG, in a press release.