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The London Stock Exchange (LON:LSE) has secured a US analytics business, in a deal worth $535 million.
According the deal, LSE has agreed to acquire The Yield Book, Citigroup’s fixed income analytics service, alongside its indexing businesses.
LSE said the acquisition would help to foster its presence within the US markets. In a statement, LSE confirmed that it expects the deal to “enhance and complement LSEG’s Information Services data and analytics offering, building on FTSE Russell’s US market presence and fixed income client base globally”.
Citigroup (NYSE:C) has said that its Yield Book and Citi Fixed Income Indices constitutes a client base of over 350 institutions globally, marking a potentially lucrative prospect for London Stock Exchange.
“This transaction is a positive outcome for The Yield Book and Citi Fixed Income Indices for both clients and employees,” said Okan Pekin, Citigroup’s global head of Investor Services, in a statement.
The agreement is subject to regulatory approval, after which it is set be finalised during in the second half of this year.
LSE anticipates that the acquisition will add $30 million to revenues over the first three years after completion, alongside providing $18 million in cost savings across the same period, the company said.
The deal comes just two months after European regulators blocked LSE’s merger with Deutsche Boerse, amid concerns of monopolisation within fixed income trading.
The titan merger, proposed over a year ago, would have seen the creation of a European giant in trading of stocks, bonds and complex financial products, and a challenge to rival markets in the US and Asia.
Nevertheless, the EU commission ultimately rejected the deal over the concerns. EU Commissioner Margrethe Vestager commented at the time:
“The Commission cannot allow the creation of monopolies, and this is what would have happened in this case.
“And this is why we have prohibited this merger, for the benefits of competition in Europe in financial markets, to the benefit of European business and therefore also European citizens.”
This marked the third attempt at securing merger between the two companies after previous failures back in 2000 and 2005.
Shares in LSE remain steady, currently up by 0.97 percent as of 15.19PM (GMT).