Microsoft buys stake in London Stock Exchange

Technology company snaps up 4% of bourse operator in a move that will allow its data platform to become cloud-based

The London Stock Exchange Group will move its tech infrastructure and Refinitiv platforms on to the Microsoft Cloud. Reuters
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Microsoft has bought a 4 per cent stake in the London Stock Exchange Group (LSEG) as part of a 10-year deal that will result in the stock exchange operator's data platform moving into the cloud.

Under the partnership arrangement, Microsoft and the LSEG will have a minimum spend of $2.8 billion in LSEG's cloud operations, which will result in the digital move of the bourse operator's technology infrastructure and Refinitiv platforms on to the Microsoft Cloud.

LSEG told investors that the total costs for the partnership could be between $300 million and $350 million over the next three years, which could hit its profit margins during that time as a result of the one-off costs.

“The initial focus will be on delivering interoperability between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications and a new version of LSEG’s Workspace,” Microsoft said.

(FILES) In this file photo the Microsoft logo is pictured during the annual Microsoft shareholders meeting in Bellevue, Washington on November 29, 2017.  Microsoft will acquire artificial intelligence and cloud computing company Nuance for $19.7 billion, the company announced on April 12, 2021. Nuance's technology is used extensively in medical records, and the transaction will bolster Microsoft's healthcare offerings, Microsoft said in a news release. The transaction is all-cash and the sum includes Nuance's net debt.
 / AFP / Jason Redmond

David Schwimmer, the chief executive 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.

“We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyse and trade securities around the world, and create substantial value over time.”

Refinitiv, which provides financial market data and infrastructure, was formed in 2018 and bought by LSEG a year later for $27 billion from a Blackstone and Thomson Reuters' consortium.

The move turned the exchange into the second-largest financial data company after Bloomberg.

Under the deal, Microsoft will buy LSEG shares from the Blackstone and Thomson Reuters consortium.

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG following the Refinitiv deal.

The sale of 4 per cent of LSEG to Microsoft is expected to be completed in the first quarter of 2023.

Under the new partnership, Microsoft's executive vice president of its cloud and artificial intelligence group, Scott Guthrie, will become a non-executive director of LSEG, subject to approvals.

LSEG shares were 4 per cent higher in morning trade on Monday.

Updated: December 12, 2022, 10:01 AM