IHS Markit and S&P Global have entered into a definitive merger agreement to combine in an all-stock transaction which values IHS Markit at $44 billion, including $4.8 billion of net debt.
Douglas Peterson, president and CEO of S&P Global, will serve as CEO of the combined company. Lance Uggla, chairman and CEO of IHS Markit, will stay on as a special advisor to the company for one year following the deal’s closing.
Peterson said: "This merger increases scale while rounding out our combined capabilities, and accelerates and amplifies our ability to deliver customers the essential intelligence needed to make decisions with conviction.
“We are confident that the strengths of S&P Global and IHS Markit will enable meaningful growth and create attractive value for all stakeholders."
Uggla added: "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.
"Our highly-complementary products will deliver a broader set of offerings across multiple verticals for the benefit of our customers, employees and shareholders."
The leadership team will comprise senior leaders from both organisations with Ewout Steenbergen, executive vice president and chief financial officer of S&P Global, retaining his role in the combined company.
Current chair of S&P Global Richard Thornburgh will also serve in the same role for the combined company, while the board of directors will include the current S&P Global board of directors and four directors from the IHS Markit board.
IHS Markit said that combined company bring together highly-complementary assets from both firms will provide comprehensive solutions across data, platforms, benchmarks and analytics.
In a joint statement, the firms said strategic rationale for the merger including greater scale and business mix, creating strong offerings in high-growth adjacencies such as environmental, social and governance, counterparty risk management, supply chain and trade, and alternative data, which together represent $20 billion of total addressable market, growing at least 10 percent annually.
The combined company will continue to deploy "well above $1 billion annually on technology", as part of its "ongoing commitment to remain on the cutting edge of technology and innovation", the statement continued.
For projected profitability, the new entity will target 200 basis points of annual EBITA margin expansion.
The transaction is expected to close in the second half of 2021, subject to regulatory approval.
Each share of IHS Markit common stock will be exchanged for a fixed ratio of 0.2838 shares of S&P Global common stock.
Upon completion of the transaction, current S&P Global shareholders will own approximately 67.75 percent of the combined company on a fully diluted basis, while IHS Markit shareholders will own approximately 32.25 percent.
