Microsoft (MSFT) is buying a 4% stake in the London Stock Exchange Group (LDNXF) as part of a deal that will see the market operator spend at least $2.8 billion over 10 years on the software provider’s cloud services.
The companies announced the partnership in a joint statement on Monday, touting the benefits it will deliver to the stock exchange’s customers through improved data and analytics. Shares of the London Stock Exchange Group (LSEG) gained 4% in early trade.
The partnership “creates attractive revenue growth opportunities for both companies,” LSEG CEO David Schwimmer said in the statement.
As part of the deal, the London Stock Exchange’s data platform and other technology infrastructure will migrate into Microsoft’s Azure cloud environment.
The companies also plan to work together to develop new products and services for data and analytics using Microsoft Azure, Microsoft Teams and Microsoft’s artificial intelligence (AI) capabilities.
As a start, the exchange will be able to share its data and analytics with Teams and Microsoft 365, which includes Excel and PowerPoint. “The partnership will build on the good progress made by LSEG on the integration of Refinitiv and enhance its position as a world-leading financial markets infrastructure and data provider,” the statement said.
LSEG completed its $27 billion acquisition of Refinitiv last year, making it the second largest financial data company after Bloomberg. Its data and analytics business makes up two-thirds of group revenue.
The deal with Microsoft includes a commitment by LSEG to spend at least $2.8 billion on the software provider’s cloud-related products and services over the 10-year term of the partnership. This is consistent with existing long-term spending plans, according to the statement.
Microsoft will buy its LSEG shares from Blackstone and Thomson Reuters (TRI). The purchase is expected to complete in the first quarter of 2023.