S&P Global has sold the ‘gold standard’ identifier for securities services, CUSIP Global Services (CGS), to FactSet for $1.9 billion in cash.
Connecticut-based FactSet, which entered into a definitive agreement to acquire CGS from S&P Global, will receive an estimated tax benefit of approximately $200 million as part of the transaction, which will expand its critical role in global capital markets, advancing its open data strategy.
The deal is expected to close during the first quarter of 2022 and marks the end of a more than 50-year relationship between S&P Global, which has managed CGS since its inception, and the American Bankers Association (ABA), which established the service in 1968 to improve operating efficiencies across the industry based on a standard method of identifying securities.
S&P Global was forced to divest its interest in CGS to secure regulatory approval from the European Commission for its pending merger agreement with IHS Markit. The acquisition is subject to customary closing conditions, including regulatory approvals and the consummation of the S&P Global and IHS Markit merger.
In October, S&P Global and IHS Markit received conditional approval from the Commission for their $44 billion megadeal, which will create a data and analytics powerhouse to rival Bloomberg and Refinitiv.
CGS will form part of FactSet’s Content and Technology Solutions (CTS) division and is expected to increase CTS’s Annual Subscription Value (ASV) to more than $425 million. The CGS team will report to Jonathan Reeve, executive vice president and head of CTS at FactSet.
“CGS is a unique asset with tremendous market recognition providing deep alliances across the financial industry,” said Phil Snow, FactSet CEO. “Its core competency in securities identification aligns well with FactSet’s industry leading data management capabilities. We believe this acquisition will greatly benefit FactSet’s clients, employees and shareholders.”
Rob Nichols, ABA president and CEO, said it is excited to partner with FactSet to build on the long, proud history of the CUSIP system to meet the evolving needs of the global capital markets. “We appreciate the close, working relationship we have had with S&P Global since CUSIP’s creation more than 50 years ago,” he said, “and we look to forward to exploring new opportunities to grow and expand the CUSIP system with FactSet.”
“Working closely with our partners at ABA, Scott Preiss, managing director and global head of CUSIP Global Services, said market participants can count on the talented professionals at CGS during this transition and into the future.
The ABA launched the CUSIP system with CGS in 1968 to improve operating efficiencies across the industry based on a standard method of identifying securities. Since then, CUSIP has been widely recognized as the gold standard identifier for securities.
CGS manages a database of 60 different data elements uniquely identifying more than 50 million
global financial instruments. It is the exclusive provider of CUSIP and CINS identifiers globally and also acts as the official numbering agency for ISIN identifiers in the United States.
To date, more than 62.8 million CUSIP identifiers have been assigned to financial instruments, irrespective of trading venue, across a broad range of asset classes – with more than 9 million in active use today.