EC approved acquisition of Refinitiv by LSEG

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AK&M 14 January 2021 16:20

The European Commission January 13 approved, under the EU Merger Regulation, the acquisition of Refinitiv by the London Stock Exchange Group (LSEG), as it was informed in the press release of EK.

The approval is conditional on full compliance with a commitments package offered by LSEG and results of the in-depth investigation of the proposed transaction, which combines the activities of LSEG and Refinitiv.

During its in-depth investigation, the Commission gathered extensive information and feedback fr om a very large number of competitors and customers of LSEG and Refinitiv and cooperated with competition authorities around the world, as well as with the European Securities and Markets Authority.

Following its in-depth investigation, the Commission had concerns that the transaction, as initially notified, would have harmed competition in some markets.

To address the Commission's competition concerns, LSEG offered the following commitments: to divest its 99.9% stake in the Borsa Italiana group, which includes MTS (LSEG's trading venue for EGBs), to a suitable purchaser. In this regard, on 9 October 2020 LSEG and Euronext signed a definitive and binding sale and purchase agreement; to continue offering its global OTC IRD clearing services performed by LCH Swapclear on an open access basis and to not engage in commercial strategies that would discriminate customers based on the source of their OTC IRD trade submitted to LSEG for clearing; to provide access to the LSE venue data, FTSE UK Equity Indices, and WM/R FX Benchmarks to all existing and future downstream competitors.

LSEG also commits to maintain an information barrier between the personnel handling sensitive information of LSEG's customers and Refinitiv's CRTD and desktop service businesses to ensure that there is no exchange of such information with Refinitiv that could negatively impact third party data vendors.

The duration of the OTC IRD and financial data commitments is ten years.

The commitments also include a fast track and binding dispute resolution mechanism that can be relied upon by third parties who believe that LSEG does not comply with these commitments. A trustee will monitor the implementation of the commitments, and act as a point of contact for potential complainants, including in the context of the fast track dispute resolution mechanism.

The commitments offered by LSEG fully address the competition concerns raised by the proposed transaction. The Commission therefore concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.

London Stock Exchange Group, headquartered in London (UK) is one of Europe's pre-eminent financial infrastructure companies, best known for operating the London Stock Exchange. It also owns Borsa Italiana, the Italian stock exchange, and operates a number of other trading platforms for trading of stocks, other equity-like exchange traded products, bonds and derivatives. LSEG is also active in the post-trading space. LSEG also offers settlement and custody services as well as indices, data, and other information products.

Refinitiv, headquartered in New York City (US) is one of the main providers of financial markets data and infrastructure, serving over 40,000 institutions in 190 countries. Refinitiv offers consolidated real-time datafeeds through its product Elektron, desktop solutions through its product Eikon as well as non-real time datafeeds and discrete content sets. It is active in indices predominantly in the foreign exchange benchmarks segment, wh ere it provides its flagship WM/Reuters FX benchmark. Refinitiv also controls several electronic trading venues in various asset classes.