S&P Global’s $44bn Acquisition of IHS Markit

By Christina Lee, Ryan Horlick, and Britney Cheng (University of Michigan), Nihat Anwar, Hannah Ohlsson, and Wilma Tillqvist (Stockholm School of Economics)


Overview of the deal

Acquirer: S&P Global

Target: IHS Markit

Implied Equity Value: $44 billion

Total Transaction Size: $39.2 (-$4.8 billion net debt)

Closed date: Expected: Second half of 2021

Transaction advisor(s): Goldman, Sachs & Co. LLC (lead), Citi, Credit Suisse to S&P Global

Morgan Stanley & Co. LLC (lead), Barclays, Jefferies LLC, and J.P. Morgan Securities LLC to IHS Markit

On November 29th, S&P Global and IHS Markit announced that they had entered into a definitive merger agreement unanimously approved by both boards of directors. At $44 billion, this landmark deal would be the largest all-stock deal of 2020, combining two of the largest providers of data to Wall Street. Under the terms of the merger agreement, IHS Markit shareholders will receive a fixed ratio of .2838 shares of S&P Global stock for each IHS share, while S&P Global shareholders will own approximately 67.75% of the combined company.

The merger is highly complementary, as it is in line with S&P’s goal of building out its data and subscription services. For example, IHS Markit’s tracking of transportation and energy data can be paired with S&P Global’s commodities business, Platts, helping to expand service mix and market intelligence to a wide range outside of just financial services. If approved, this combination of one of the oldest names in the financial market with a relative newcomer will point to the new wave of market intelligence and the immense growth and demand for market data.

"This announcement is an important milestone in bringing together our two world-class organizations to power the markets of the future. As a combined company, we will provide customers the intelligence they need to make decisions with conviction while providing growth and development opportunities for our people." Douglas Peterson, President and Chief Executive Officer of S&P Global.

“We believe this combined leadership team reflects the strengths of both organizations and brings the right skills, expertise and experience as we work to drive long-term growth and shareholder value while continuing to deliver for our customers." Lance Uggla, Chairman and Chief Executive Officer of IHS Markit

Company Details: Acquirer - S&P Global

S&P Global Inc. is an American publicly traded corporation in New York City that primarily works in financial information and analytics. S&P puts emphasis on delivering data, research, credit ratings, benchmarks and ESG solutions that governments, companies, and individuals utilize to make daily decisions.

Founded in 1917, headquartered in New York, USA

CEO: Douglas L. Peterson

Number of employees: 23,000 (2019)

Market Cap: $77.88bn as of 17/12/2020

EV: $79.4bn as of 17/12/2020

LTM Revenue: $7.31bn

LTM EBITDA: $4.05bn