Microsoft is taking a 4% stake in the London Stock Exchange Group as part of a 10-year commercial deal to migrate the exchange operator’s data platform into the cloud.
As part of the deal, LSEG has made a contractual commitment for minimum cloud-related spend with Microsoft of $2.8bn over the term of the partnership.
Microsoft said the basis of the partnership will be the digital transformation of LSEG’s technology infrastructure and Refinitiv platforms on to the Microsoft Cloud.
David Schwimmer, CEO of LSEG, said:
“This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business, and will transform the experience for our customers.
Microsoft is buying its stake from a Blackstone/Thomson Reuters consortium, which sold financial data company Refinitiv to LSEG in a £22bn takeover in 2019.
Shares in the LSEG have jumped 4%, to the top of the FTSE 100 leaderboard.
Victoria Scholar, head of investment at interactive investor says:
The tie-up will ‘meaningfully’ increase the stock exchange’s revenue growth over time. In return, LSEG has agreed to a minimum spend on Microsoft’s cloud services of $2.8 billion over the decade.
Investors in LSEG are cheering the stake build by the tech giant. It complements the LSE’s cloud-centric aspirations, which it has been working on delivery since the acquisition for $27 billion of financial data company Refinitiv in January 2021.
Shares in LSEG have outperformed over a one-year period rallying more than 10% to Friday’s close. The partnership with Microsoft has further boosted its stock price with investors enjoying a pick-up today.