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| - Ratings giant S&P Global reached an all-stock deal to buy IHS Markit for $44 billion, creating a giant in data and analytics used by Wall Street, the companies announced Monday. The companies said combining will bolster offerings to investor clients and provide complementary information streams in growth areas, such as in the shift towards renewable energy and the trend of environmental, social and governance (ESG) investing. "Through this exciting combination, we are able to better serve our markets and customers by creating new value and insights," said Douglas Peterson, the chief executive of S&P Global and who will serve as CEO of the combined company. S&P is best known for its Dow and S&P 500 equity indices and for its credit ratings business, while IHS Markit for its purchasing manager surveys that are an advance indicator of economic activity, as well as its military and security information subsidiary Jane's Information Group. "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," Peterson said. The merger will create a $126-billion financial services behemoth that will be headquartered in New York. S&P shareholders will own nearly 68 percent of the new company, while shareholders in UK-headquartered IHS Markit will own the rest. The firms said they expect the merger to generate some $680 million in cost savings by the end of the fifth full year after closing, which is expected in the second half of next year. In a conference call with analysts, Peterson said both companies brought key energy data tools and products that should lead to revenue growth as investment grows in climate-friendly energy. Peterson also highlighted improved capacities to evaluate private companies for mergers or go-public transactions. The deal will add four IHS Markit directors to S&P Global's 13-member board of directors. Peterson will serve as CEO of the combined company, while IHS Chief Executive Lance Uggla will stay on for one year as a special advisor following the closing of the deal, which is expected in the second half of 2021. Uggla said on the conference call that he was convinced that combining provided the best way forward and that "both sets of shareholders are better off together than either is on our own." Uggla said he plans to remain a long-term shareholder of the combined company once he exits. Shares of IHS Markit jumped 6.5 percent to $98.57 in early trading, while S&P Global gained 0.8 percent to $344.44. bur-jmb/bgs
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