Financial information and analytics company S&P Global Inc. is reportedly close to finalizing an agreement to acquire its rival IHS Markit Ltd. for around $44 billion.
The deal would combine two of the worlds' largest financial data providers and solidify S&P Global's dominance.
Sources familiar with the negotiations said that the two companies might make an announcement as early as this week. However, the same sources warned that there was still a chance of the talks falling apart at the last minute since no one has yet to make any commitments.
S&P Global, which was founded in the 1860s and the oldest name on Wall Street, is currently worth around $82 billion. IHS Markit, a relatively new player in the industry, is worth around $37 billion. According to sources, S&P Global is looking to acquire IHS Markit in an all-stock deal that would value its stocks at a slight premium.
Analysts said that the merger of the two companies would make a lot of sense as their services would pair well together. IHS Markit was formed back in 2016 as the result of a merger between two smaller players.
The company mainly supplies software that is used to underwrite bond offerings and corporate stocks. It also offers data point tracking for transportation and energy data, which would work well with S&P Global's commodities business.
The planned consolidation comes as the financial data market has reached new heights with mostly computer-driven trading and investments now becoming the new norm. With Wall Street's rapid digitalization, demand for market intelligence, big data and data analytics has skyrocketed.
At the reported value of $44 billion, a merger between S&P Global and IHS Markit would be the largest consolidation of the year worldwide. According to Dealogic, the deal would beat Nvidia's $40 billion acquisition of chip designer ARM Holdings.
Mergers and acquisitions activity this year has dropped by more than 12% compared to last year's volumes, Dealogic data showed. The deals that were completed this year were mostly in the oil and gas sector. Global M&A volumes dropped to their lowest during the second quarter due to the pandemic, with volumes slowly recovering in the following quarter.
