Written by: Katie Scott, Business Reporter
American technology giant Microsoft is buying a stake in the London Stock Exchange (LSEG), which runs the FTSE 100.
Microsoft is buying the stake from a consortium of Blackstone and Thomson Reuters; and the news saw LSEG’s share price rise by 4 percent in early trading. The deal will see the two companies work together on data analytics and cloud technology.
The deal comes at a time when the crown that LSEG proudly bore as Europe’s financial centre has been slipping according to analysts. Quoting Bloomberg data, The Guardian reports that “...the UK capital accounted for $1.8bn (£1.46bn) of the $20.9bn raised in European listings this year. Representing just 9 percent of the total.” This, it adds, is the lowest share since the 2007-08 financial crisis.
In contrast, LSEG’s rival Euronext, has been expanding with the purchases of the Irish stock exchange in 2018 and the Italian stock exchange - Borsa Italiana - in 2021. Of the latter, Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext N.V. said: “This transaction marks a historic day in our ambition to build the backbone of the Capital Markets Union in Europe.” Just last week, Boujnah told Bloomberg News that London is no longer Europe’s financial centre because of Brexit.
The deal seems to have buoyed LSEG. In a statement to the stock market on Monday 12th December, it said the deal was “expected to increase LSEG’s revenue growth meaningfully over time as new products come on-stream”. In a statement from Microsoft, the company’s chair and chief executive, Satya Nadella, promised huge changes: “Advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes, and adapt to changing market conditions.”
